It's a race for green bonds, bonds aimed at no carbon and environmentally sustainable projects. Enel, through its subsidiary Enel Finance, has just completed a new 1 billion euro issue. It's the third, the previous ones in January 2017 and January 2018, which the group led by Francesco Starace carries on and successfully completes. A few days ago Terna also launched a 250 million green issue, while in April Eurizon Capital launched a new Fund specializing in green bonds.
Enel boasts a high rating (BBB+ for S&P, Baa2 for Moody's, BBB+ for Fitch) and this certainly helps investors. "It is envisaged that the green bond - specifies the issuer's press release - will be listed on the regulated market of the Irish Stock Exchange, on the regulated market of the Luxembourg Stock Exchange and will be admitted to trading on the "ExtraMOT PRO" multilateral trading facility organized and managed by Borsa Italiana. It is also expected that the green bond will be assigned ratings in line with those of Enel”.
Going into detail, the issue amounts to 1 billion euro, as mentioned, and envisages repayment in a single tranche at maturity, on 21 July 2025 and payment of a fixed-rate coupon of 1,5%, payable every year in arrears in July, starting from July 2019. The issue price was set at 98,565% and the effective yield at maturity is 1,736%. The expected settlement date for the issue is January 21, 2019.
But what will these new bonds be for? They will be used to finance or refinance the green projects of the Enel group and, in particular, the development, construction and repowering of generation plants from renewable sources; the creation, management and operation of transmission and distribution networks, as well as smart metering systems (digital meters); the development, construction, installation and maintenance of projects related to sustainable mobility, smart lighting, energy efficiency and demand response. That is, in practice all the qualifying operations in execution with the new 2019-21 business plan. In fact, Enel's plan has foreseen the refinancing of 13,6 billion euros by 2021, also through the issue of green bonds to lead the group towards a low-carbon economy. Finally, the issue is part of the agreement signed in December 2017 by Enel with eight other international industries for the development of green bonds, which are particularly well received by the public.
Proof of this is the fact that the operation has attracted subscriptions for an amount exceeding 4,2 billion euro, with a significant participation of the so-called Socially Responsible Investors (SRI). With this new step, Enel is also continuing to diversify its investor base and build the 17 Sustainable Development Goals launched in 2015 by the UN.
Enel availed itself of a syndicate of banks within which acted, as joint-bookrunners, Banca Akros, Banca IMI, BofA Merrill Lynch, Credit Agricole CIB, CaixaBank, Commerzbank, Credit Suisse, ING, JP Morgan, Mediobanca, Raiffeisen Bank International, Société Générale, UBI Banca, UniCredit Bank.
