Petrotrin,
Citibank seal major bond deal
By
Clint Chan Tack
Trinidad & Tobago
Newsday
Port
Spain
Petroleumworldtt.com
07 22 07
STATE oil company Petrotrin and Citibank (Trinidad
and Tobago) have successfully closed one of the
largest bond deals in the Caribbean and the proceeds
from this deal will prove invaluable to ongoing
efforts by Government to diversify the national
economy. The closure of the US$750M fixed rate
bond between these two companies was celebrated
at a function at the Hilton Trinidad last Wednesday.
Citibank
(TT) managing director Dennis Evans said this
bond represented “the largest investment
grade deal to ever come out of Trinidad and the
Caribbean for either a sovereign or state entity
or for that matter a private corporation. Petrotrin’s
offering attracted investors from the US, Europe,
Asia and the Caribbean and this clearly demonstrates
our coming of age in the international financial
markets.” Evans said many people have asked
and have been surprised to learn that a transaction
of this magnitude was not guaranteed by the Government
of TT. “This bond was not government guaranteed
but completed on a purely stand alone basis and
on Petrotrin’s balance sheet strength and
performance. This demonstrates a further maturity
within the international markets,” Evans
declared.
Noting
Petrotrin’s reputation over the years
as a reliable supplier of quality petroleum products,
Evans said: “The proceeds of this financing
will be used to fund Petrotrin’s Gasoline
Optimisation Project (GOP). Its completion will
ensure the company’s continued and expanded
access to its important export markets.” He
added that Petrotrin achieve a fixed coupon of
six percent on these 15-year notes and “was
able to attract over US$2 billion interest from
investors.” “We are proud of this rate
as it represents a spread of just 140 basis points
over US Government Treasuries and it is within
the pricing we had promised when winning the RFP.
Yet again, Citi has been able to deliver well within
its commitment,” Evans said.
Petrotrin
executive chairman Malcolm Jones agreed with
Evans that “this represents the largest
investment grade bond deal ever issued in a single
energy project in the Caribbean and the second
largest Caribbean bond issue ever.” Jones
said this was a prime example of how the local
banking community could leverage international
financial resources to fully support the strategic
initiatives of the domestic energy sector. He said
Petrotrin will use the net proceeds of the US$750M
bond issue to finance a large portion of its GOP
which will see the “construction of five
new plants at the Pointe-a-Pierre Refinery.”
Jones
said successful completion of Petrotrin’s
GOP was critical because it would enable the State
oil company to “bring cleaner and more environmentally
friendly transport fuels to the regional and international
markets.” “This will impact positively
on our profitability and viability well into the
future. It will also enable us to honour all of
our contractual commitments,” the Petrotrim
chairman added. “Upon completion of the GOP,
we believe that we will be well-placed to be one
of the best suppliers of quality, environmentally
friendly gasolines in the region,” Jones
said.
Delivering
the feature address, Minister in the Ministry
of Finance Conrad Enill said completion
of this bond issue was another example of Citibank’s
commitment to Government’s development initiatives.
Noting that Citibank has been a major financier
to the public and private sectors (especially the
energy sector since its establishment in 1965),
Enill said he had been advised that the bank was
able to raise more than $10 billion in capital
in the last year.
The
minister said the most recent being the US$150M
bond offering for the Government and the US$66.5M
private placement to transform the Port-of-Spain
port “into the transportation and transhipment
hub of the Caribbean region.” Enill expressed
Government’s thanks to Citibank for its role
in the US$400M placement to finance several key
expansion projects for the National Gas Company
and the Atlantic LNG Train One project. The minister
added that nobody should be surprised by this because
a review of the bank’s performance over the
last 25 years, shows that it has been able to raise
in excess of $25 billion in the public and private
sectors.
Enill
said he looked forward to Citibank’s
continued role in “providing competitive
and innovative financing solutions for our public
and private sectors as well as for the development
of our domestic capital market.
The
minister added that Petrotrin’s ability
to finance its GOP was also “a key public
objective of the Government of TT which would allow
access to markets not currently served by the company.”
Trinidad
& Tobago Newsday
Thursday, July 19 2007
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©2007 Daily News Limited . All Rights Reserved.
