Edison successfully completes the issuance of 500 million euros in debt securities
Public disclosure required by Consob Resolution No. 11971 of May 14, 1999, as amended. Edison’s return to the international capital markets is greeted by orders that exceed the amount of the offering by more than three times. The seven-year issue, which pays interest quarterly at a variable rate of 60 basis points above the three-month Euribor, was placed at a reoffer price of 99.807%.
Milan, July 09, 2004 - Edison SpA (Baa3 positive / BBB+ stable) today successfully completed the issuance of variable-rate debt securities totaling 500 million euros.
These seven-year securities, which pay interest quarterly at a variable rate of 60 basis points above the three-month Euribor, have a yield of 63 basis points.
Caboto, HSBC, Morgan Stanley, Royal Bank of Scotland and UBM served as Joint Lead Managers and Joint Bookrunners.
The issue is consistent with the strategy that the Group is implementing to optimize the cost and duration of its borrowings. The proceeds will be used to refinance existing debt, increase the medium-term portion of Edison’s indebtedness and lengthen its average maturity to more than four years.
The offering was oversubscribed by more than three times. Moreover, it produced a further improvement in the Group’s liquidity profile and enabled it to fully refinance its indebtedness through 2006.
The placement was carried out within the framework a 2-billion-euro EMTN program (securities totaling 700 million euros have already been issued) that was listed on the Luxembourg Stock Exchange this past December.
The success of this transaction is further evidence of the Group’s return to financial health and, more importantly, of the favor with which Italian and foreign investors are viewing the Company’s growth plans, which were reemphasized yesterday by Edison’s Chairman, Umberto Quadrino, during a conference call with investors.
The Chairman confirmed the targets of 14,000 MW of installed capacity and 17 billion cubic meters in natural gas sales by 2008. The achievement of these objectives will require investments of about 3 billion euros between 2004 and 2008.
The Chairman also pointed out that the structure of the Group’s indebtedness has improved both in terms of its composition (after this latest issue, debt securities account for 60% of total indebtedness and bank borrowings for the remaining 40%) and its average maturity, which has been extended to 4.3 years.
The Company’s growth strategy, its improved operating and economic performance, its stronger balance sheet and the optimization of its debt structure have been recognized in recent months by the rating agencies. Standard and Poor’s increased Edison’s rating to BBB+, and Moody’s upgraded the Company’s outlook from negative to positive.