(Finance) – A2A today successfully placed its first hybrid subordinated perpetual bond issue in Green – use of proceeds format with a nominal value of 750 million euros.
The issue, carried out in execution of the resolution of 14 May 2024 of the Board of Directors of the Company and the resolution of the President adopted today, recorded great interest, receiving orders for approximately 2.9 billion euros, approximately 4 times
the amount offered.
The security, placed at an issue price of 99.460% and characterized by a non-call period of 5.25 years, will have a perpetual duration and will pay a fixed annual coupon of 5.000% until the first reset date scheduled for 11 September 2029. Starting from that date, unless early repayment has taken place, the security will accrue annual interest equal to the reference five-year Euro Mid Swap rate increased by an initial margin of 225.8 basis points, increased by additional margin of 25 basis points starting from 11 September 2034 and a subsequent increase of a further 75 basis points starting from 11 September 2049.
“This issue, in support of projects in the energy transition and circular economy, further strengthens the Group’s capital structure and credit profile in compliance with the guidelines of the 2024-2035 Strategic Plan, diversifying
at the same time the investor base – commented Luca Moroni, CFO of A2A – The operation also confirms A2A’s commitment to respecting robust credit metrics in line with the current investment grade rating”.
The net proceeds deriving from the issue will go to finance and/or refinance the Eligible Green Projects: strategic circular economy and energy transition projects linked to the development of renewables, the environmental sector, electricity networks and the water cycle defined within the Sustainable A2A Finance Framework, verified by Vigeo Eiris. Among the selected projects are also recently acquired assets in the field of electricity networks and renewable energy production.
The securities are governed by English law and will be requested to be admitted to listing on the regulated market of the Luxembourg Stock Exchange from 11 June 2024, subject to the signing of the relevant contractual documentation.
The bond is expected to be assigned a “BB+” rating by Standard and Poor’s and a “Ba1” rating by Moody’s and an equity content of 50%.
The placement operation was managed by BNP Paribas, Goldman Sachs International, JP Morgan and UniCredit as Structuring Agents and Global Coordinators and by BBVA, BofA Securities, Crédit Agricole CIB, Citigroup, Intesa Sanpaolo (IMI CIB Division), Mediobanca , Morgan Stanley, Santander and Société Générale as Joint Lead Managers.
A2A is assisted by the Clifford Chance law firm and the banks by A&O Shearman.