Rome, October 10th, 2019 - Enel Finance International N.V. (“EFI”), the Dutch-registered finance subsidiary of Enel SpA (“Enel”¹ ), today launched a multi-tranche “sustainable” bond for institutional investors on the European market totalling 2.5 billion euros. The bond is linked to the achievement of the United Nations Sustainable Development Goals (SDGs) and is the Group’s first “General Purpose SDG Linked Bond” issued on the European market.

 

“After our successful SDG-linked bond placement in the US, we have launched our first-ever sustainable bond on the European market, and the excellent outcome of this issuance is further evidence of the growing appetite of investors for innovative, sustainable financing tools,” said Enel CFO Alberto De Paoli. “There is a clear link between sustainability and value creation, as by investing in environmentally and socially sustainable projects companies can secure high profitability and minimise risks, while contributing to the achievement of SDGs. We are confident that companies will increasingly embrace this model, orienting their businesses towards an overall strategy that places sustainability at the core of their investment and financing decisions.”

 

The bond, which is guaranteed by Enel and launched as part of Enel and EFI's medium-term bond issue programme (Euro Medium Term Notes Programme - EMTN), was almost four times oversubscribed, with total orders of about 10 billion euros and the significant participation by Socially Responsible Investors (SRIs), enabling the Enel Group to continue to diversify its investor base. The issue is expected to be listed on the Irish Stock Exchange.

 

The strong demand for the bond issued today once again confirms the appreciation of the markets for the soundness of the Group's sustainable strategy and its consequent financial results, reflecting Enel's push towards increasingly sustainable finance. The issue is in line with the SDG linked bond launched on the American market by EFI in September 2019 for a total of 1.5 billion US dollars, as well as the three previous green bonds issued by EFI on the European market, for a total of 3.5 billion euros.

 

The success of the issue is also a recognition of the Group's ability to generate value by contributing to the achievement of the UN SDGs. Once again, the value of sustainability was reflected in the demand and pricing mechanics of the bond, allowing Enel to obtain a discount of around 10 bps with respect to a comparable issue without sustainability characteristics, representing a discount of around 20% across the weighted average cost of the whole transaction.

 

Enel is focused on creating value through business decisions that support the pursuit of the following four SDGs over the 2019-2021 plan:

 

In particular, this bond issue, which will be used to meet the Group’s ordinary financial requirements, is linked to Enel’s ability to achieve the following Sustainable Development Goals:

i. SDG 7 “Affordable and clean energy”, through the achievement, by December 31st, 2021, of a percentage of installed renewable generation capacity (on a consolidated basis) equal to or greater than 55% of total consolidated installed capacity. As of June 30th, 2019, the figure was already equal to 45.9%;

ii. SDG 13 "Climate action", through the achievement of a level of greenhouse gas emissions by 2030 equal to or less than 125 g of CO2 per kWh (in 2018 this figure was already equal to 369 g of CO2 per kWh), in line with the commitment to reduce Enel’s direct greenhouse gas emissions per kWh by 70% by 2030 compared to the 2017 values, as certified by the Science Based Targets initiative (SBTi) and consistent with the Paris Agreement on climate change.

 

More specifically, the issue is structured in the following tranches:

  o the issue price was set at 99.123% and the effective yield at maturity is equal to 0.189%;

  o the interest rate will remain unchanged to maturity subject to achievement of the sustainability target indicated under point i. above as of December 31st, 2021;

  o if that target is not achieved, a step-up mechanism will be applied, increasing the rate by 25 bps as of the first interest period subsequent to the publication of the auditor’s assurance report.

 

 o the issue price was set at 99.257% and the effective yield at maturity is equal to 0.474%;

 o the interest rate will remain unchanged to maturity subject to achievement of the sustainability target indicated under point i. above as of December 31st, 2021;

 o if that target is not achieved, a step-up mechanism will be applied, increasing the rate by

25 bps as of the first interest period subsequent to the publication of the auditor’s assurance report.

 

 o the issue price was set at 98.922% and the effective yield at maturity is equal to 1.204%;

 o the interest rate will remain unchanged to maturity subject to achievement of the sustainability target indicated under point ii. above as of December 31st, 2030;

 o if that target is not achieved, a step-up mechanism will be applied, increasing the rate by 25 bps as of the first interest period subsequent to the publication of the report issued by a third-party expert charged with validating the methodology for measuring CO2 emissions applied by the Group.

 

Additional information on the guiding principles of the bond issue and the Group’s sustainability strategy is available on the Enel website, at www.enel.com/investors/fixed-income/main-programs/sdg-bond.

 

The operation was supported by a syndicate of banks, with Banca IMI, Barclays, BBVA, BNP Paribas, BofA Merrill Lynch, CaixaBank, Credit Agricole CIB, Credit Suisse, Deutsche Bank, Goldman Sachs International, HSBC, ING, J.P. Morgan, Mediobanca, Mizuho, MUFG, Natixis, Santander Corporate & Investment Banking, SMBC Nikko, Unicredit acting as joint-bookrunners.

 

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This announcement does not constitute or form part of any offer to sell or a solicitation of an offer to buy any securities in the US or any other jurisdiction. This announcement does not constitute a prospectus or other offering document. No securities have been or will be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the US or any other jurisdiction. No securities may be offered, sold or delivered in the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state or other securities laws of the US or any other jurisdiction. No public offering is being made in the United States or in any other jurisdiction where such an offering is restricted or prohibited or where such offer would be unlawful. The distribution of this announcement may be restricted by applicable laws and regulations. Persons who are physically located in those jurisdictions in which this announcement is circulated, published or distributed must inform themselves about and observe any such restrictions.

This communication is also directed only at (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to, and will only be engaged in with, relevant persons. Any person who is not a relevant person should not act or rely on this communication.

The documentation relating to the issue of the securities is not and will not be registered with the National Commission for Listed Companies and the Stock Exchange ("CONSOB") pursuant to applicable legislation. Therefore, the securities may not be offered, sold or distributed to the public in the Italian Republic except to qualified investors, pursuant to Art. 100 of Italian Legislative Decree No. 58 of 24 February 1998 (the "Consolidated Law on Finance") and Art. 34-ter of CONSOB Regulation No. 11971 of 14 May 1999 (the "Issuers’ Regulations"), in each case as amended from time to time, or in other circumstances provided for in Art. 100 of the Consolidated Law on Finance or in the Issuers’ Regulations, in each case in compliance with all legislative and regulatory provisions or requirements imposed by CONSOB or other Italian Authorities.

 

 

¹ Enel’s ratings: BBB+ (stable) for Standard & Poor’s, Baa2 (positive) for Moody’s, and A- (stable) for Fitch.