Dana Gas and Crescent Petroleum's Pearl Petroleum Raises $500 Million in Bond Sale

The five-year senior secured bond carries a fixed coupon of 10.375 per cent and matures in November 2031. The companies said orders reached 1.7 times the amount on offer, which allowed Pearl Petroleum to raise the deal size from an initial target of $400 million. Investors came from the US, the UK, Europe, the Middle East and Asia.

The proceeds will refinance Pearl Petroleum's existing $350 million senior secured bond, fund debt service reserve arrangements and support further development of the Khor Mor and Chemchemal gas fields. Some will also go to general corporate purposes.

The companies said investors showed confidence in the business despite high global bond yields, persistent inflation concerns and geopolitical uncertainty in the region. The coupon above 10 per cent reflects the price of borrowing for an energy project in Iraq's Kurdistan Region at a time of regional conflict.

"This successful bond placement demonstrates international confidence in Pearl Petroleum and in the future of Iraq's natural gas sector," said Majid Jafar, chief executive of Crescent Petroleum and board managing director of Dana Gas. He said the consortium remains committed to developing Khor Mor and Chemchemal now that the KM250 project is complete.

Richard Hall, chief executive of Dana Gas, said strong demand let Pearl Petroleum increase the issue size and gave it the financial flexibility to refinance its existing bond and pursue its next phase of growth.

Dana Gas and Crescent Petroleum each own 35 per cent of Pearl Petroleum. Austria's OMV, Hungary's MOL and Germany's RWE each hold 10 per cent. The consortium was set up in 2009 and has invested about $4 billion in infrastructure and operations in the Kurdistan Region. Its gas supplies about 80 per cent of the region's electricity generation, the companies said.