03 May 2013 08:16 [Source: ICIS news]
DUBAI (ICIS)--Iowa Fertilizer Co, a wholly owned subsidiary of Orascom Construction Industries, said it is planning to build a $1.8bn (€1.39bn) fertilizer plant in Iowa by 2015 for which it has successfully issued $1.2bn tax-exempt bonds to institutional and individual investors.
The bond proceeds will be used to finance the cost to develop and construct the new greenfield nitrogen-based fertilizer complex, representing the largest investment in Iowa's history, said Orascom in a statement.
The project is expected to create 165 full-time permanent jobs and also create up to 3,500 construction positions while the plant is being built.
Orascom said the bond issuance received a BB-minus rating from Standard & Poor's and Fitch, and it represents the "largest non-investment grade transaction ever sold in the US tax-exempt market".
The transaction received $3.5bn in orders from more than 75 major institutional investors, including mutual funds, insurance companies and hedge funds.
“…over-subscription is further affirmation of the Iowa Fertilizer long-term value proposition, utilising low cost natural gas to develop fertilizer and DEF production in the heart of the US Corn Belt,” said Nassef Sawiris, Orascom’s CEO.
“Given the strong market reception, the interest rate was reduced by up to 10 basis points, resulting in an average interest rate on the bonds of 5.12%,” he added.
The Netherlands-based Orascom, Egypt's largest publicly traded company, seeks to transfer its share listing to an European stock exchange.
The fertilizer group owns and operates nitrogen fertilizer plants in the Netherlands, the US, Egypt and Algeria. It has an international distribution platform spanning from the Americas to Asia and a fertilizer production capacity of around 7m metric tonnes.
($1 = €0.77)
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