Italy’s Enel succeeds with £500m sustainability bond

Roma, gennaio 2016: Sede generale. Il nuovo logo ENEL.

Enel Finance International N.V. (EFI), the Dutch-registered finance company controlled by Italy’s Enel, Europe’s biggest utility, successfully launched a single-tranche “sustainability-linked bond” for institutional investors on the sterling market totaling £500 million.

The issue, guaranteed by Enel, was oversubscribed by almost six times, with total orders of £3 billion and the significant participation of socially responsible investors (SRI).

“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,” said Enel.

“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 operation was supported by a syndicate of banks, with Barclays, BNP Paribas, Bank of America Merrill Lynch, Citi, Crédit Agricole CIB, Deutsche Bank, Goldman Sachs International, HSBC, J.P. Morgan, Morgan Stanley, Natixis, Société Générale Corporate & Investment Banking acting as joint-bookrunners.

Enel is rated BBB+ (stable) by Standard & Poor’s, Baa2 (positive) by Moody’s and A- (stable) by Fitch.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.