Eni: 5-year retail bond with 4,30% rate at the start The yield exceeds both its own bonds and the BTP

After an absence of 12 years, Eni is once again addressing the retail public by offering a bond with a duration of 5 years and a fixed rate gross of at least 4,30%, a yield that proves to be higher than both the yields of Eni's own bonds and ai BTP of equal duration. The novelty is that for the first time Eni is offering small savers a sustainability linked bond, i.e. indexed to pre-established sustainability objectives. The offer will start Monday January 16 and it will be possible to join also online until Friday 20 Januaryunless closed early. The total value of the emission is of 1 billion euros, but, says Eni in a note, "should there be excess demand, this amount could be increased up to 2 billion", while the minimum lot was set at 2.000 euros (equal to 2 bonds), with possible increases for at least one bond.

Eni retail bond: "we offer a solid savings tool"

THEgoal for Eni, as resolved by the Board of Directors on 27 October last, is to raise money to "finance any future needs, to maintain a balanced financial structure and further diversify financial sources" says a note from the company which has two bonds due this year (one in July and one in September) for a total of about 2 billion euro.

“Eni is today one extremely robust company from a financial and industrial point of view, with a growth model aimed at making the most of the businesses linked to energy transition and the traditional ones that fuel its success, which are also subject to the progressive reduction of emissions and which continue to guarantee the security of supplies” said Claudio Descalzi, Chief Executive Officer of Eni. “With this awareness we want to offer the Italian public one solid savings tool, which can make him part of our journey towards a completely decarbonised, technologically advanced and diversified energy, and of the further consolidation of our decisive ability to guarantee the country's energy security". The Eni title in Piazza Affari share this morning 14,37 euros, up 0,90%. In the last month it has gained 5,57%.

How convenient is the Eni rate? Here is the comparison with other issues on the market

The duration of the Bonds, which will be listed on the Mot market of Borsa Italiana, is 5 years with effect from 10 February 2023 and the capital will be repaid in full upon smaturity of the loan, February 10, 2028. Il rate proposed by Eni offers a premium both with respect to its own bonds on the market, and also with respect to BTPs of the same duration. Let's see how. Eni already has it on the market 3 bonds maturing in 2028, all with lower yields: 17 May offers a yield of 3,76% on the market today, 14 June 3,58% and 19 June 3,68%. Convenience is also found compared to a BTP of the same duration: the government bond with a maturity closest to the one proposed by Eni is February 2028, 3,45 which today offers a yield of 2% (with a coupon of 93,50% and a price of XNUMX). Also to be considered different taxation: the yield of Btp is taxed at 12,50%, therefore net it is at 3%. The Bond Eni, for which no bank commissions are paid, instead it has a taxation of 26%, for a net 3,18%. In any case, the yield remains higher than the BTP. Eni also has a rating higher than that of the Italian Republic: A- against BBB.

Sustainability targets: if not achieved, the final coupon will be upgraded

In detail, as described in the Informative prospect approved by Consob, the last coupon payable on February 10, 2028 will be connected the achievement of the following Eni sustainability targets: reduction of net greenhouse gas emissions (Scope 1 and Scope 2) associated with Upstream business operations. Specifically, the objective is to reduce the Net Carbon Footprint Upstream indicator (Scope 1 and 2) to a value equal to or less than 5,2 MtCO2eq as at 31 December 2025 (-65% compared to the 2018 baseline); and increase in the installed capacity for the production of electricity from renewable sources, up to a value equal to or greater than 5 GW as at 31 December 2025.

If these goals will reached, the gross annual nominal rate of 4,30% will remain unchanged until the deadline. If, on the contrary, even just one of the two targets is not reached, the interest rate on the coupon payable on the maturity date (February 10, 2028) will be increased by 0,50%.

The banks that are part of the placement syndicate

The bonds will be placed through the placement consortium and guarantee coordinated and directed by Intesa Sanpaolo and UniCredit Bank AG of which they are part Banca Akros – Banco BPM Group, BNP Paribas, BPER Banca SpA and Crédit Agricole CIB and in which other banks, securities firms and other authorized intermediaries will participate as distributors.