Is in the has successfully placed a multi-tranche bond worth 2 billion dollars (equal to 1.9 billion euros at the current exchange rate) aimed at institutional investors, characterized by sustainability criteria. The operation was managed by Enel Finance International, a subsidiary of the Enel group, and received orders for a total of 5.6 billion dollars, exceeding the amount of the issue by three times. The proceeds will be used to cover the group’s ordinary financial needs, including the refinancing of maturing debt.
How much does the new bond yield
The issue of the bond is linked to the achievement of theEnel’s sustainability objective concerning the reduction of the intensity of Scope 1 greenhouse gas (GHG) emissions relating to the production of electricity. This goal contributes to global efforts to achieve the United Nations Sustainable Development Goal 13, focused on combating climate change.
The issue is in fact compliant with the sustainability-linked financing framework of the Enel group, recently updated in January last year.
There first trancheworth 1,250 million dollars (i.e 1,164 million euros), offers a fixed interest rate of 5.125%. The settlement date is set for 26 June 2024, while the maturity is scheduled for 26 June 2029. The issue price was set at 98.878%, with a effective yield to maturity of 5.384%. The interest rate will remain unchanged until maturity, conditional on achieving the Sustainability Performance Target (Spt) objective equal to or lower than 125 gCO2eq/kWh by 31 December 2026.
The second tranche, worth 750 million dollars (i.e 698 million euros), offers a fixed interest rate of 5,500%. The settlement date is set for 26 June 2024, while the maturity is scheduled for 26 June 2034. The issue price was set at 98.379%, with a effective yield to maturity of 5.715%. Also in this case, the interest rate will remain unchanged until maturity, subject to the achievement of the Sustainability Performance Target (SPT) objective equal to or lower than 72 gCO2eq/kWh by 31 December 2030.
The issue, with an average duration of approximately 7 years, it is characterized by an average cost in euros of approximately 4%, in line with the cost of collection on the European market. This new Sustainability-Linked Bond, in line with the Group’s Strategic Plan, contributes significantly to the achievement of Enel’s objectives regarding the Group’s total gross debt deriving from sustainable financing sources, set at approximately 70% by 2026. Rating agencies have given a provisional rating of BBB from Standard & Poor’s, BBB+ from Fitch and Baa1 from Moody’s to the bond.
The banks that worked on the issue
The issue was managed by a banking syndicate made up of prestigious financial institutions: Barclays, Bnp Paribas, Bank of America, Citigroup, Credit Agricole, Goldman Sachs, HSBC, Imi-Intesa Sanpaolo, JP Morgan, Mizuho, Morgan Stanley, Mufg, Société Générale, Smbc and Wells Fargo.
“The outcome of the placement, both in terms of demand and the issuance cost obtained, once again demonstrates investors’ confidence in our financial and environmental sustainability strategy, as well as in the 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 – he states Stefano De AngelisCFO of the Enel Group – We will continue with commitment on our path of long-term value creation and energy transition, through investments in networks, renewable energy and end customers”.
The proceeds from the issue are expected to be used to finance the group’s routine needs, including the refinancing of maturing debt.
