TAQA North Ltd. senior unsecured notes rated 'AA-' on Abu Dhabi National Energy Co. guarantee

The notes are unconditionally and irrevocably guaranteed as to payment of principal and interest by Abu Dhabi National Energy Company PJSC (TAQA; AA-/Stable/A-1+).

TAQA is a United Arab Emirates-based energy holding company established in 2005 and majority owned by the Emirate of Abu Dhabi (AA/Stable/A-1+). TAQA principally owns and invests in companies engaged in power generation, water desalination, oil and gas, and related energy businesses.

The proceeds of the notes will be used to partly finance TAQA North's recently announced acquisition of Canada-based Prime West Energy Trust for approximately C$5 billion and for various other corporate purposes.

The rating on the notes is the same as the long-term corporate credit rating on TAQA. Any change in the rating on TAQA will therefore result in a corresponding change in the rating on the notes. This reflects the unconditional and irrevocable guarantee on the notes given by TAQA and the pari passu ranking of this guarantee with the parent company's unsecured and unsubordinated obligations.

The terms and conditions of the notes set out a number of events of default in relation to TAQA. These include a change of control clause whereby noteholders have the opportunity to put the notes to TAQA North in the event that the Emirate of Abu Dhabi directly or indirectly owns less than 50% of TAQA. There is also a cross-acceleration provision against TAQA's debt.

If TAQA North were to issue debt that did not benefit from the guarantee, the rating would be dependent on the subsidiary's own credit quality. Depending on the terms and conditions of any such issue, the potential impact of structural subordination on TAQA's existing debt would need to be considered.