EnBW successfully issues hybrid bonds

Karlsruhe. EnBW Energie Baden-Württemberg AG, Karlsruhe, successfully issued two hybrid bonds with a term to maturity of approximately 60,5 years each; yesterday a EUR hybrid bond with a volume of 725 million and already on Monday this week a 300 million USD tranche. The bonds were placed with investors in Europe and Asia. Based on terms and conditions, the bonds will be recognised half as equity by the rating agencies Moody’s and Standard & Poor’s.

The transaction was structured by BNP Paribas, HSBC and J.P. Morgan in cooperation with EnBW. The placement of the EUR bond was complemented by a syndicate of banks comprising BBVA, Royal Bank of Scotland and Unicredit.

„Hybrid bonds are a key element of EnBW’s capital structure. With this transaction we were able to diversify our investor base and to achieve favourable funding conditions simultaneously. EnBW intends to use the net proceeds primarily to refinance existing indebtedness“, states Thomas Kusterer, Chief Financial Officer of EnBW.

The date of issue will be 5 October 2016. The first interest payment date is 5 April 2017. EnBW has the right to repay the bonds prematurely for the first time five and a half years after the first interest payment date and thereafter at any interest payment date. The EUR bond is equipped with a coupon of initially 3.375%, the USD bond with a coupon of initially 5,125%. The bonds will be subordinated to all other financial liabilities and rank equal with EnBW’s hybrid bonds outstanding.

Thomas Kusterer: "Until 2020 on Group level the adj. EBITDA contribution of the business segments Grids and Renewable Energies will increase to more than 70% and our business risk profile will increase further. The successful issuance of the hybrid bonds indicates that the stringent implementation of our 2020 Strategy and the improving risk-return-profile are convincing investors.“

At the start of September this year, EnBW had provided investors with comprehensive information about the company and the product on a three-day road show. There was great interest on the part of investors. Due to the high demand regarding the EUR bond, book building was completed in just a few hours and the bonds were clearly oversubscribed. With a denomination of EUR 1,000 and USD 2,000 the securities are aimed at institutional investors as well as private investors.