Eesti Energia completes successful bond transaction

Eesti Energia today completed an additional issue of Eurobonds due in 2018, with a nominal value of EUR 100 million. With 40 international capital market investors participating in the transaction, the issue was 4 times oversubscribed, and its yield of 2.181% is the lowest in Eesti Energia’s history of Eurobond issues.

“We are very satisfied with the result. For Eesti Energia, the situation on the international capital markets is attractive. Base interest rates are low, and investors’ assessment of the quality of our credit continues to also be high. High interest by investors allowed us to complete the transaction speedily and to raise debt capital at a very attractive interest rate,” affirmed Margus Kaasik, Member of the Management Board at Eesti Energia. The funds raised from the investors will be mainly used to complete the construction of the power plant at Auvere.

Demand for Eesti Energia’s notes exceeded the EUR 400 million mark. “High demand by investors allowed the credit margin to be lowered from the originally proposed 120 basis points to the final level of 112 basis points on the day of the transaction,” said Kaasik, explaining the lead-up to the successful transaction.

The geographic distribution of the investors buying the notes was as follows: Scandinavia and Baltic States 50%, Germany 26%, UK 14%, Austria and Switzerland 5%, and the rest of Europe 5%. In terms of investor type, participants in the transaction included Investment Funds 63%, Pension Funds 28%, Commercial Banks & Private Banks 7%, and Insurance Companies 2%.

The newly issued notes, listed on the London Stock Exchange, have been priced at 109.085%. Together with the notes sold in April 2012, the aggregate value of the issued notes due on 2 October 2018 is now EUR 400 million.

Deutsche Bank and Nordea Markets acted as the main book runners for the transaction.