Enel puts money where its mouth is in USD-3.5bn bond issue

Italian utility giant Enel SpA (BIT:ENEL) has issued a four-tranche USD-3.5-billion (EUR 3.28bn) bond, linking one of the tranches to its objective to emit zero direct greenhouse gases from the production of power and heat by 2040.

The bond was structured in four tranches -- two of USD 750 million maturing in 2025 and 2027, and two of USD 1 billion, maturing in 2032 and 2052, Enel said on Thursday. Interest rates on all four are linked to Enel’s ability to progressively reduce its scope 1 emissions by a certain date. If the company fails to achieve the emissions target by that date, the interest rate will increase by 25 basis points.

The interest rate on the 2052 bond, fixed at 5.500%, will remained unchanged to maturity, subject to the company achieving 0 grammes of CO2 equivalent per kWh at December 21, 2040.

The commitment to bond investors is consistent with Enel’s plan to speed up its decarbonisation process by ten years, and achieve net zero in 2040 with only renewables in its power mix.

“For the first time ever for a multinational energy group, a bond is linked to a trajectory towards full decarbonization, with the 30-year tranche of this issuance being linked to the Group’s target of achieving zero direct greenhouse gas emissions by 2040 from the production of electricity and heat,” Enel said in a statement following the oversubscribed issuance.

International backs Barclays, BBVA, BNP Paribas, Bank of America, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Santander, Societe Generale acted as joint-bookrunners.

Enel will use the proceeds from the bond to fund ordinary financing needs.

(USD 1.0 = EUR 0.936)

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