(Finance) – Is in the successfully launched on the European market the issue of a non-convertible, perpetual hybrid subordinated bond with a euro denomination, intended for institutional investors, for a total amount of 900 million euros.
The operation – explains a note – reflects the financial strategy of the Enel Group, aimed at optimize the cost of capital serving the industrial investments of the 2024-2026 Strategic Plan. The issue also takes advantage of the favorable window offered by current market conditions to refinance in advance the next maturities of the Company’s portfolio of hybrid instruments.
In detail, the operation refinanced the perpetual hybrid bond of 900 million euros equity accounted with first call date in February 2025 and coupon of 3.500% (ISIN: XS2000719992).
The bond received subscription requests exceeded more than 3 timestotaling orders for an amount equal to more than 3 billion euros.
The operation is carried out in execution of the resolution of December 18, 2023 of the Company’s Board of Directors, which mandated the issue by Enel, by December 31, 2024, of one or more non-convertible bonds, in the form of hybrid subordinated securities.
The bond, structured in a single tranche of 900 million euros, is a non-convertible perpetual hybrid subordinated loan, without a fixed maturity and payable only in the event of dissolution or liquidation of the Company, as specified in the relevant terms and conditions. A fixed annual coupon of 4.750% will be paid until the first reset date (excluding) 27 May 2029, which corresponds to the last day for the first optional redemption. Starting from that date, unless it has been fully repaid, the bond will accrue interest equal to the five-year Euro Mid Swap rate increased by an initial margin of 212.9 basis points, increased by a further margin of 25 basis points starting from 27 May 2034 and a subsequent increase of a further 75 basis points from 27 May 2049. The fixed coupon is payable annually in arrears in the month of May, starting from May 2024. The issue price is set at 99.454% and the effective yield at the first reset date is 4.875% per year.
There expected settlement date it is February 27, 2024.
The securities will be listed on the regulated market of the Irish Stock Exchange (Euronext Dublin). It is also expected that the agencies will assign them a rating of Baa3/BB+/BBB- (Moody’s/S&P’s/Fitch) and an equity content of 50%.