CFO Agostino Scornajenchi: “Working towards a leading role in the sustainable finance market”
Terna begins the new year by confirming its leading role in energy transition as well as in the financial sector. Its strategy, which unites sustainability and growth to generate increasing benefits for all stakeholders, was consolidated on 10 January with the launch of a euro-denominated fixed-rate green bond in the form of a private placement, for a total of €250 million. This marks the relaunch of the bond issue announced to the market on 16 July 2018 and carried out on 23 July. The move is part of Terna’s financial optimisation programme designed to meet the requirements of the Group's industrial plan, confirming the increasingly important role of the Italian national grid operator in the sustainable finance market. The securities, with an original maturity of five years (a remaining term of four and a half years and maturing on 23 July 2023), will pay a 1.000% coupon and will be issued at a price of 99.787%, with a spread of 90 basis points compared to the mid-swap, with a 1.05% yield, slightly lower than the July 2018 issue.
This offers further proof of the importance of sustainability as a key value for the Group and that “our aim is to assume a leading role in the sustainable finance market which, although undoubtedly still in its infancy, is growing at a consistent rate,” highlighted Terna's CFO, Agostino Scornajenchi. “In this context, we want to return to the market on a continuous basis and dedicate a significant proportion of our debt to this type of product. In further confirmation of this approach, I am pleased to be able to point out that, alongside the collection through Green Bonds, the Group has recently signed an ESG-linked Revolving Credit Facility with a reward/penalty mechanism linked to achieving specific environmental, social and governance (“ESG”) objectives,” added Terna's CFO.
“More specifically, the transaction regards the re-issue of a bond issued last July but aimed at a single private European investor,” explained Terna’s Finance Manager, Francesco Beccali. “The very low coupon, which was in fact the lowest yielding Italian corporate fixed-rate bond launched in the last twelve months, along with the total transaction at 250 million euro, are confirmation that Terna is able to access the financial markets at any time and in extremely competitive conditions”.
What are the issues intended to do? To fully or partially finance or refinance, “Eligible Green Projects” that meet the criteria listed in the “Green Bond Framework” published by Terna and which comply with the “Green Bond Principles 2018” published by the Icma (International Capital Market Association). Therefore, explained Scornajenchi, "the proceeds generated by the bond will be used to finance projects aimed at increasing production from renewable sources, such as the connection of power plants using renewable sources; projects aimed at reducing the system's CO2 emissions through the reduction of grid losses (such as network infrastructures that enable a more efficient transmission of electricity); and projects aimed at reducing land use and protecting biodiversity.”