Investing.com – Is in the Finance International (Efi), a financial company controlled by Enel (BIT:), has launched a multi-tranche “Sustainability-Linked Bond” aimed at institutional investors in the US and international markets for a total amount of 2 billion US dollars, equivalent to approximately 1.9 billion euros.
The issue, guaranteed by Enel, received oversubscriptions approximately 3 times, totaling total orders for an amount of approximately 5.6 billion dollars.
What is the Bond for?
Enel intends to use the proceeds of the issue to finance the group’s ordinary needs, including the refinancing of maturing debt.
The emission is linked to the achievement of Enel’s sustainability objective relating to the reduction of the intensity of GHG Scope 1 emissions relating to the production of electricity, contributing to the United Nations’ Sustainable Development Goal 13 (Fight against climate change ) and is in line with the group’s Sustainability-Linked Financing Framework.
Stefano De Angelis, CFO of the Enel group, commented: “The outcome of the placement both in terms of demand and the emission cost obtained once again demonstrates investors’ confidence in our financial and environmental sustainability strategy as well as in Sustainability-Linked Bond, an important tool to support the achievement of Enel’s strategic objectives, which aim to reduce greenhouse gas emissions along the entire value chain, with the confirmed ambition of reaching zero emissions by 2040. We will continue our commitment with commitment path of long-term value creation and energy transition, through investments in networks, renewable energy and end customers”, concluded De Angelis.
How much the bond tends
The issue is structured in two tranches:
- 1,250 million US dollars at a fixed interest rate of 5.125%, with a settlement date of June 26, 2024 and maturity on June 26, 2029. The issue price has been set at 98.878% and the effective yield to maturity is equal to 5.384%. The interest rate will remain unchanged until maturity, subject to the achievement of the Sustainability Performance Target (SPT), equal to or lower than 125gCO2eq/kWh on 31 December 2026. In the event of failure to achieve the aforementioned SPT, a step-up mechanism will be applied. up, increasing the interest rate by 25 bps, starting from the first interest period following the publication of the relevant assurance report issued by an external verifier.
- 750 million US dollars at a fixed interest rate of 5.500%, with a settlement date of June 26, 2024 and maturity on June 26, 2034. The issue price has been set at 98.379% and the effective yield to maturity is equal to 5.715%. The interest rate will remain unchanged until maturity, subject to the SPT being reached, equal to or lower than 72gCO2eq/kWh on 31 December 2030; o in case of failure to achieve the aforementioned SPT, a step-up mechanism will be applied, increasing the interest rate by 25 bps, starting from the first interest period following the publication of the relevant assurance report issued by an external verifier. The issue, which has an average duration of approximately 7 years, has an average cost in euros of approximately 4%, in line with the cost of funding on the European market. In line with the Group’s Strategic Plan, the new Sustainability-Linked Bond contributes to further accelerating the achievement of Enel’s objectives linked to the Group’s total gross debt deriving from sustainable financing sources, set at approximately 70% by 2026.
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The banks that worked on the issue
The operation was supported by a syndicate of banks, in which the following acted as joint bookrunners: Barclays (LON:), BNP Paribas, Bank of America (NYSE:), Citigroup, Crédit Agricole, Goldman Sachs (NYSE:), HSBC (LON:), IMI (LON:) – Intesa Sanpaolo (BIT:), JP Morgan, Mizuho, Morgan Stanley (NYSE:), MUFG, Société Générale, SMBC and Wells Fargo (NYSE:). In consideration of its characteristics, the issue was assigned a provisional rating of BBB by Standard & Poor’s, BBB+ by Fitch and Baa1 by Moody’s.
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