Pearl Petroleum prices $500 million bond at 10.375% for Iraqi gas

Summary

• Pearl Petroleum priced a five-year secured bond of $500 million at 10.375% annually.
• Order book covered the deal 1.7 times, letting the consortium lift the size from $400 million.
• Pricing sets a benchmark cost of debt for Kurdistan gas development through November 2031.

The latest

Pearl Petroleum has priced a $500 million senior secured bond carrying a fixed 10.375% annual coupon and maturing in November 2031, according to a Dana Gas disclosure to the Abu Dhabi Securities Exchange. The joint statement with Crescent Petroleum said international demand covered the issue 1.7 times, allowing the consortium to raise the offering from an initial $400 million.

Details

• The terms: The instrument is a senior secured bond issued by Pearl Petroleum Company Limited, priced at a fixed coupon of 10.375% a year with a five-year tenor maturing in November 2031, according to the joint Dana Gas and Crescent Petroleum statement filed with the Abu Dhabi bourse.
• The order book: Demand reached 1.7 times the offering, with institutional investors from the United States, the United Kingdom, Europe, the Middle East and Asia participating, the statement said. That coverage allowed the consortium to upsize the deal by $100 million, from $400 million to $500 million.
• Use of proceeds: Funds will refinance Pearl Petroleum's outstanding $350 million senior secured bond, fund required debt service reserve arrangements, support further development at Khor Mor and Chemchemal, and cover general corporate purposes, according to the disclosure.
• The assets: Khor Mor and Chemchemal are gas fields in Iraq's Kurdistan region. The companies said the financing supports continued investment in both fields and the long-term development of Iraq's natural gas resources, without setting out a spending schedule for either field.
• The market backdrop: The placement was completed despite rising global bond yields, persistent inflation concerns and regional geopolitical uncertainty, the two operators said in their joint statement to the exchange.
• Crescent's position: Majid Jafar, chief executive of Crescent Petroleum and managing director on the Dana Gas board, said the placement demonstrates international confidence in Pearl Petroleum and the future of Iraq's gas sector, citing the completion of the KM250 project and commitments to energy security and economic growth.
• Dana Gas's position: Richard Hall, chief executive of Dana Gas, called raising $500 million in the current financing environment "an excellent result," saying demand levels permitted the upsizing and gave Pearl Petroleum financing flexibility to refinance its existing bond and move into its next growth phase.
• The consortium: Pearl Petroleum was formed in 2009 by Dana Gas and Crescent Petroleum as joint operators holding 35% each. OMV, MOL and RWE later joined with 10% apiece. Dana Gas is listed on the Abu Dhabi Securities Exchange, where the disclosure was filed on 4 November 2026.
• Also: Proceeds refinance an existing $350 million bond and fund Khor Mor and Chemchemal.

Background

Pearl Petroleum has financed its Kurdistan operations through secured bond issuance before, with a $350 million instrument now being taken out by the new five-year paper. The consortium's two operators each hold matching 35% stakes, with three European energy companies holding the balance.

Between the lines

The 10.375% coupon prices in both the asset location and the market window the operators themselves described as difficult. Yet the 1.7 times coverage and the $100 million upsize suggest institutional buyers in five regions were willing to underwrite Kurdistan gas risk at that level, effectively establishing a reference cost of debt for the sector through 2031.

What's next

Watch the settlement and redemption of the outstanding $350 million bond, further Dana Gas filings to the Abu Dhabi exchange on Chemchemal development spending, and secondary market trading of the new November 2031 paper.

Source: Abu Dhabi Securities Exchange — Dana Gas disclosure (joint statement with Crescent Petroleum)