Vattenfall has successfully issued a GBP 250 million green fixed-rate hybrid bond. The issue was almost three times oversubscribed and the proceeds will finance eligible green projects that meet the requirements of Vattenfall’s green financing framework.
This is Vattenfall’s first hybrid bond issued since June 2021 and has a maturity of 60.25 years with the first reset date after 5.25 years. The transaction attracted an orderbook of above GBP 700 million. The coupon is 6.875%. Proceeds are earmarked for investments in the following four eligible categories under the Green Financing Framework dated May 2022: 1) Renewable energy, 2) Transmission and distribution of electricity, 3) Energy efficiency and 4) Clean transportation.
"The success of our first green hybrid bond since June 2021 once again underlines the broad-based support Vattenfall receives from investors to drive the energy transition forward", says Maria Paulinz, Head of Treasury at Vattenfall.
With this transaction, Vattenfall proactively manages its hybrid capital base ensuring a stable layer of rating agency equity credit. The Green hybrid capital reinforces the company’s sustainability commitment, provides cost efficient equity-like capital whilst supporting Vattenfall’s solid investment grade rating.
NatWest Markets acted as structuring advisor and Barclays, NatWest Markets and RBC Capital Markets as joint bookrunners on the bond issue.
The settlement date is 17 May 2023.
Fact box – Green GBP hybrid bond:
Size: GBP 250m
Issue Rating: Baa2 (Moody’s)/ BB+ (S&P)
Rating Agency Equity Treatment: 50 percent equity and 50 percent debt
Listing: Nasdaq Stockholm
Documentation: Standalone, Reg S
Governing law: Swedish law