Elia System Operator (Elia) has launched a €300m 10-year senior bond and €700m perpetual hybrid to refinance a bridge loan to acquire an additional 20% stake in Eurogrid International SCRL (Eurogrid).


Image: Elia raises funds to acquire additional stake in Eurogrid. Photo: Courtesy of tungphoto/FreeDigitalPhotos.net

The acquisition of the additional 20% stake in Eurogrid, which is the holding company of the German TSO 50Hertz Transmission GmbH (‘50Hertz’), executed on 26 April this year, was temporary financed by Elia via a bridge loan. As previously announced, the long-term financing would be organised by issuing a mix of hybrid and senior bonds, the proceeds of which will be used for the redemption of the bridge loan.

The €300m senior bond, matures in 2028 and has an annual coupon of 1.50%.

The €700m hybrid bond has a first call date in December 2023 and a coupon of 2.75%, with a reset every five years thereafter. The hybrid bond has received an instrument rating of BBB- from S&P. The hybrid bond is structured as perpetual instrument, has junior ranking to all the senior debt and will be recorded as equity in the Elia’s accounts (with coupons recorded as dividends) pursuant to IFRS. The hybrid will also receive an intermediate 50% equity content from S&P.

Investors showed great interest, with book building completed in just a few hours due to high demand and the bonds were significantly oversubscribed.

Bank of America Merill Lynch and BNP Paribas acted both as global coordinators and joint bookrunners on these transactions with ING Bank and NatWest Markets Plc acting as joint bookrunners.

Source: Company Press Release