EnBW issues hybrid bond with 62-year maturity

Karlsruhe. EnBW Energie Baden-Württemberg AG has today placed a hybrid bond with a volume of € 1 billion. The subordinated bond has a term to maturity of approximately 62 years with early call options for EnBW. Based on its terms and conditions, the bond will be recognised partially as equity by some rating agencies, thereby supporting EnBW’s good credit standing.

Barclays, Credit Suisse, Deutsche Bank AG, HSBC und Société Générale were the joint bookrunners. The transaction was structured by Deutsche Bank AG and HSBC in cooperation with EnBW.

"The currently excellent market environment has proved decisive to this successful transaction. We seized a very attractive window of opportunity to strengthen our capital structure and to further improve EnBW’s credit standing,“ explains Thomas Kusterer, EnBW’s CFO.

The issue date will be 18 March 2014, and repayment is scheduled at latest for 2 April 2076. The first interest payment date is 2 April 2015. EnBW has the right to make early repayment of the bond for the first time on 2 April 2021, and every five years subsequently. The bond carries an initial coupon of 3.625%. EnBW also has the right to suspend interest payments. Such payments must nevertheless be made at a later date when EnBW distributes a dividend or pays coupons on other hybrid bonds. The bond will be subordinated to all other financial liabilities and rank equal with the hybrid bond outstanding.

Thomas Kusterer adds: "By subscribing, bond investors have shown that they believe EnBW is in a position to implement the ‘Energiewende’ as planned under its EnBW 2020 strategy. This bond reduces our capital costs, and we also gain additional flexibility for the implementation of our strategy.“

Investors showed great interest, with bookbuilding being completed in just a few hours due to the high demand. The bond was significantly oversubscribed.