French power utility Engie SA (EPA:ENGI) last week issued EUR 850 million (USD 1.02bn) of green hybrid bonds, it announced on Monday.
The coupon for this issue has been set at 1.5% p. a. and the first non-call period is set at 8 years. The new issue premium – at 0.25% below the secondary market price – is also one of the lowest ever seen on the market.
At the same time, Engie has launched a buyback offer for three of its existing hybrid bonds. The offer, which closed on 25 November 2020, enabled Engie to repurchase EUR 850 million of existing bonds, an amount equal to the amount of the new issue.
The transaction enables Engie to extend the maturity of its hybrid debt by 1.1 years while reducing its recurring cost by 0.30% on an unchanged outstanding basis.
Engie’s credit quality, combined with the hybrid and green nature of the issue, made it possible to reach an order book close to EUR 4 billion before guidance revision, and to guarantee that the issue was oversubscribed (2.7x) at the final price.
The European Investment Bank ranks first among the investors. Orders have come from BeNeLux (29%), France (17%), the United Kingdom & Ireland (17%), southern Europe (16%) and Germany (15%). Approximately 80% of the book was allocated to sustainable investors.
Judith Hartmann, EVP, member of the collegiate management team and the Group’s Chief Financial Officer, said:
“The success of this transaction, with its historically low coupon, once again demonstrates investors’ confidence in Engie’s signature and its strategic orientations. This transaction also confirms Engie’s role as a leader in green financing, helping to accelerate the development of its sustainable projects.”
Engie’s green bond framework has received a second party opinion from ESG research and rating agency Vigeo Eiris. In its opinion, the agency said that Engie’s bond is aligned with the core components of the Green Bond Principles voluntary guidelines 2018.
Under the use of proceeds section, Vigeo Eiris states that Engie will use the funds to finance or refinance renewable energy, energy storage, transmission and distribution infrastructure and other sustainable and environmentally conscious projects.
With a total of EUR 12 billion issued in green format since 2014, Engie, as a leader in the energy transition and the green bond market, continues its commitment to reduce its emissions of greenhouse gases by following a trajectory in line with the Paris Agreement, as certified by the Science Based Targets initiative.
Source Natural Gas World