Enel has launched a new issue of dual tranche bonds for a total of 2.5 billion euros with 4 and 7 years, therefore maturing in 2030 and 2033. The market response to this offer was very positive, with requests for 8.5 billion euros, 3.5 times higher than what was made available by the company.
The coupon should therefore average around 3.688%, while the bond settlement should be released on May 26th. This is not an extraordinary loan, but a collection aimed at financing the ordinary expenditure of the Enel Group.
Enel’s new dual tranche bond
The most important features of Enel’s new bond are:
- an offer on the market of 2.5 billion euros;
- duration of 4 or 7 years, depending on the tranche;
- minimum fixed coupon at 3.5%.
The bond is reserved for qualified investors, who responded very positively, asking for the equivalent of 8.5 billion euros in financial products. The supply-demand ratio was therefore 3.5.
The bond will serve to finance the normal operations of the Enel group, in accordance with the 2026-2028 Strategic Plan, presented last February.
The differences between the two tranches
There are significant differences between the two tranches offered by Enel to its investors. Regarding the first tranche:
- it is worth 1.25 billion euros;
- has a fixed interest rate of 3.5%;
- expires on 26 May 2030, therefore has a duration of four years;
- the issue price is 99.681% of the nominal price;
- it follows that the effective yield to maturity is 3.587%.
The second tranche, however, has slightly different characteristics:
- covers the other half of the issue, 1.25 billion euros;
- has a fixed interest rate of 3.875%;
- it expires on May 26, 2033, therefore a duration of 7 years;
- the issue price is 99.513% of the nominal price;
- the effective yield to maturity is 3.956%.
Enel is considered a very solid company, with good ratings from rating agencies:
- Standard & Poor’s rates its debt at BBB with a positive outlook;
- Moody’s rates its debt at Baa1 with stable outlook;
- Fitch rates its debt BBB+ with a stable outlook.
The details of the operation
The transaction was supported by a consortium of banks, including Banca Akros, BofA Securities, BNP Paribas, BPER, CaixaBank, Commerzbank, IMI-Intesa Sanpaolo, ING, JP Morgan, Mediobanca, Mizuho, Santander and SMBC.
Once issued, the bond will be listed on the Euronext market in Dublin and on the MOT, the Electronic Bond Market of the Italian Stock Exchange.
Enel is among the companies on the Italian stock exchange that will distribute a dividend to its shareholders in 2026. Unlike the majority of the Ftse Mib, the index of which Enel is part, the group did not detach the coupon on May 18th, but will do so on July 20th, with payments scheduled for the 22nd of the same month. However, the company has already distributed part of the dividend, 23 cents, in January, to which the 26 in July will be added.
