Enel Finance International, the Dutch-registered finance company controlled by Enel, launched a single-tranche “Sustainability-Linked bond” for institutional investors on the sterling market totaling 500 million pounds sterling, equivalent to about 550 million euro.
The issue, which is guaranteed by Enel, was oversubscribed by almost six times, with total orders of approximately 3 billion pounds sterling and the significant participation of Socially Responsible Investors (SRI), allowing the Enel Group to continue to diversify its investor base.
The success of the issue on the markets is a clear signal of the acknowledgement of the Group’s sustainability strategy and its ability to generate value by contributing to the achievement of the Sustainable Development Goals (SDGs) set by the United Nations. The value of sustainability has been reflected once again in the demand and the pricing mechanics of the issue, enabling Enel to obtain a financial advantage equal to 15 bps compared with an issue of bonds without sustainability features.
This bond issue, the first of its kind on the sterling market, is intended to meet the Group’s ordinary financing needs and follows the adoption by Enel of a “Sustainability-Linked Financing Framework”, a world’s first framework that presents the whole Sustainability-Linked financing strategy across multiple funding solutions (commercial papers, loans and bonds), fully integrating sustainability into the Group’s global funding program. The Framework is aligned with the International Capital Market Association’s (ICMA) “Sustainability-Linked Bond Principles” and Loan Market Association’s (LMA) “Sustainability-Linked Loan Principles”, as verified by the Second-Party Provider Vigeo Eiris.
In line with the Framework, the bond is linked to the Key Performance Indicator (KPI) of “Renewable Installed Capacity Percentage” (i.e., the percentage of consolidated renewable installed capacity on total consolidated installed capacity) and to the related achievement of a Sustainability Performance Target (SPT) equal to or greater than 60% by December 31st, 2022 (as of June 30th, 2020, the figure was equal to 51.9%). To ensure the transparency of the results, the achievement of the target will be certified by a specific assurance report issued by an auditor engaged for this purpose.
The issuance has been structured as a single tranche issue of 500 million pounds sterling paying a rate of 1.000% maturing October 20th, 2027. The issue price has been set at 99.747% and the effective yield at maturity is equal to 1.038%. The settlement date for the issue is October 20th, 2020.
The interest rate will remain unchanged to maturity subject to achievement of the SPT indicated above as of December 31st, 2022.