(Finance) – Enel Finance International (“EFI”), financial company controlled by Is in thelaunched a “Sustainability-Linked bond” in two tranches on the Eurobond market aimed at institutional investors for a total of 1.75 billion euros.
“The outcome of the placement confirms the market’s positive response to the 2024-2026 Strategic Plan and its attention to financial discipline, aimed at increasing the return on invested capital and improving the Company’s credit profile,” he commented Stefano De Angelis, CFO of the Enel Group. “In order to satisfy the significant interest from investors, the placement amount has been increased from the initial amount. In line with the Group’s strategic priorities, we will continue to work tirelessly to achieve financial and greenhouse gas emissions reduction goals communicated to the markets, in order to create long-term value for all our stakeholders”.
The issue, guaranteed by Enel, received requests more than 3 times higher than the offer, totaling total orders for an amount of approximately 5.8 billion euros and a significant participation of socially responsible investors (SRI). It is expected that the proceeds of the issue will be used by EFI to refinance the Group’s routine needs for maturing debt.
The new issue involves the use of two sustainability Key Performance Indicators (“KPIs”) for each tranche, illustrated within the Sustainability-Linked Financing Framework (the “Framework”) last updated in January 2024, confirming the commitment of Enel in the energy transition and contributing to the environmental and financial sustainability of the Company’s development strategy.
The Framework is aligned with the “Sustainability-Linked Bond Principles” of the International Capital Market Association (ICMA) and with the “Sustainability-Linked Loan Principles” of the Loan Market Association (LMA), as certified by Second-Party Opinion Provider Moody’s Investors Service.
The issue is structured as follows two tranches: 750 million euros at a fixed rate of 3.375%, with a settlement date set at 23 January 2024, and maturity on 23 July 2028: the issue price is set at 99.727% and the effective yield at maturity is equal to 3.445%; the interest rate will remain unchanged until maturity, subject to the joint achievement of the following Sustainability Performance Targets (“SPT”), specifically: for the KPI linked to the “Percentage of CAPEX aligned to the EU taxonomy (%)”, upon achievement of an SPT equal to or greater than 80% as of 31 December 2026 for the period 2024-2026; for the KPI linked to the “Intensity of Scope 1 GHG emissions relating to electricity production (gCO2eq/kWh)”, upon reaching an SPT equal to or lower than 125gCO2eq/kWh on 31 December 2026; in the event of failure to achieve one or both of the above-mentioned SPTs, a step-up mechanism will be applied, increasing the rate by 25 bps, starting from the first period of interest following the publication of the relevant assurance report issued by an external verifier; 1,000 million euros at a fixed rate of 3.875%, with a settlement date set at 23 January 2024, and maturity on 23 January 2035: the issue price is set at 98.792% and the effective yield at maturity is equal to 4.013%; the interest rate will remain unchanged until maturity, subject to the joint achievement of the following SPTs, specifically: for the KPI linked to the “Intensity of Scope 1 GHG emissions relating to electricity production (gCO2eq/kWh)”, upon achievement of an SPT equal to or less than 72 gCO2eq/kWh on 31 December 2030;
for the KPI linked to the “Percentage of renewable installed capacity (%)”, upon reaching an SPT equal to or greater than 80% on 31 December 2030; in the event of failure to achieve one or both of the above-mentioned SPTs, a step-up mechanism will be applied, increasing the rate by 25 bps, starting from the first period of interest following the publication of the relevant assurance report issued by an external verifier.
The issue, which has an average duration of approximately 8 years, has an average coupon of 3.66%.
The bond loan will be listed, at the time of issue, on the Euronext regulated market in Dublin.
In line with the 2024-2026 Strategic Plan, the new Sustainability-Linked Bond contributes to the achievement of the Group’s objectives linked to the relationship between sustainable financing sources and the total gross debt of the Group itself, set at approximately 70% in 2026 .
The operation was supported by a consortium of banks including Banca Akros, Barclays, BBVA, BNP Paribas, BPER Banca, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs, IMI-Intesa Sanpaolo, JP Morgan, Natixis, Santander , Société Générale, Unicredit acted as joint bookrunners.