After the success of first SDG linked bond issue (UN Sustainable Development Goals) finalized last September on the US market for 1,5 billion, Enel does an encore. The group has announced that it has launched on the European market, through its subsidiary Enel Finance International, a multi-tranche "sustainable" bond issue for a total of 2,5 billion euros intended for institutional investors, linked to the achievement of the Development Goals Sustainable (SDG) 7 and 13 of the United Nations. It's about the first General Purpose SDG Linked Bond launched by the Enel Group on the European market.
The issue, explains the press release with which the group announced the new operation, “has been received requests made redundant almost 4 times, totaling orders for an amount of approximately 10 billion euros and a significant participation of Socially Responsible Investors (SRI), allowing the Enel Group to continue to diversify its investor base. The issue is expected to be listed on the regulated market of the Irish Stock Exchange.
The issue is structured in the following tranches:
- 1.000 million euros at a fixed rate of 0,00%, expiring on 17 June 2024 and linked to SDG 7 “Affordable and clean energy”: the issue price was set at 99,123% and the effective yield at maturity is 0,189%; the interest rate applied will remain unchanged until the maturity of the bond loan against the achievement of the sustainable objective indicated in point i. as of 31 December 2021; in the event of failure to achieve this objective, a step up mechanism will be applied with an increase of 25bps in the interest rate, starting from the first interest period following the date of publication of the auditor's assurance report.
- 1.000 million euros at a fixed rate of 0,375%, expiring 17 June 2027 and linked to SDG 7 “Affordable and clean energy”: the issue price was set at 99,257% and the effective yield at maturity is 0,474%; the interest rate applied will remain unchanged until the maturity of the bond loan against the achievement of the sustainable objective indicated in point i. as of 31 December 2021; in the event of failure to achieve this objective, a step up mechanism will be applied with an increase of 25bps in the interest rate, starting from the first interest period following the date of publication of the auditor's assurance report.
- 500 million euros at a fixed rate of 1,125%, maturity 17 October 2034 and linked to SDG 13 “Fight against climate change”: the issue price was set at 98,922% and the effective yield at maturity is 1,204%; the interest rate applied will remain unchanged until the maturity of the bond loan against the achievement of the sustainable objective indicated in point ii. in 2030; in the event of failure to achieve this objective, a step-up mechanism will be applied with an increase of 25 bps in the interest rate, starting from the first interest period following the date of publication of the related report, issued by an appointed third-party expert to verify the methodology for measuring CO2 emissions applied by the Group.
The new SDG linked bond comes following the success of the similar issue on the American market in September 2019 for a total of 1,5 billion US dollars, and that of the 3 previous green bonds issued on the European market, for a total of 3,5, XNUMX billion euros.
The new bond "is further evidence of investors' growing interest in innovative and sustainable financing instruments," said the CFO of Enel, Alberto De Paoli. “There is a clear link between sustainability and value creation, since by investing in environmentally and socially sustainable projects, companies can maximize profits and minimize risks”.
