Elia issues EUR 1bn in bonds for 50Hertz stake acquisition

Wind turbines in the Baltic Sea. Author: Håkan Dahlström. License: Creative Commons, Attribution 2.0 Generic

August 29 (Renewables Now) - Belgian transmission system operator (TSO) Elia System Operator NV (EBR:ELI) has issued EUR 1 billion (USD 1.17bn) in bonds to refinance a bridge loan with which it financed the purchase of a 20% stake in 50Hertz Transmission GmbH.

The company sold two different bonds, a EUR-300-million 10-year senior bond, which matures in 2028 and bears a 1.5% annual coupon, and a EUR-700-million hybrid bond, structured as perpetual instrument, with a first call date in December 2023 and a coupon of 2.75%.

Elia said Tuesday there was significant investor interest in the bonds, the book building for which was wrapped up in just a few hours. The hybrid bond has junior ranking to all the senior debt and will be recorded as equity in Elia’s accounts under IFRS, the TSO noted.

The global coordinators and joint bookrunners on the bond transactions were Bank of America Merill Lynch and BNP Paribas. ING Bank and NatWest Markets Plc were appointed joint bookrunners.

50Hertz stake acquisition

In April 2018, Elia lifted its stake in Eurogrid International SCRL, 50Hertz’s holding company, to 80% from 60%, thus blocking an attempt by State Grid Corporation of China to acquire the 20% in the TSO. The deal was temporary financed by Elia via a bridge loan. The proceeds from the bond issuance will go for the redemption of that bridge loan.

50Hertz Transmission is a TSO active in the North and the East of Germany, responsible for the transportation of the wind power generated by plants in the German Baltic Sea to the onshore power grid. As at the end of 2017, the offshore wind capacity in the Baltic Sea stood at 692.3 MW.

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