Record investor attention to the EUR 300 million green bond issue of Lietuvos energija

2017-07-12
16 live roadshow events in seven European states in the course of five days; 130 interested investors from 25 States; the demand for the bonds hitting nearly EUR 1.4 billion, and the bond issue that increased from EUR 200 m to EUR 300 m as a result of favourable market conditions. Such results and numbers highlighted the offering of green bonds of the Lietuvos energija group. It attracted both international and domestic asset managers and pension funds, banks and insurance companies to actively compete for the securities of this Lithuanian state-owned company. The largest purchasers of the green bonds were German, Finish, French and Lithuanian institutional investors. 
 
The successfully placed EUR 300 million and 10-year maturity bond of Lietuvos energija became the largest and the longest maturity bond ever offered by Lithuanian companies, and the largest and longest maturity green corporate Eurobond among the issuers from Central and Eastern Europe (CEE). In the past three years no company from the CEE region managed to raise funds in the capital markets at a lower interest rate for a ten-year periodthan Lietuvos energija.
 
‘The Company’s performance during the last four years demonstrated to investors the the reliability and financial strength of Lietuvos energija. Seeing this exceptional investor interest in our green bonds, we took a chance to diversify the Group’s debt portfolio at most advantageous conditions. This successful début builds up a strong reputation of Lietuvos energija on the international financial markets, says Dr. Dalius Misiūnas, Chairman of the Board and the CEO of Lietuvos energija.
 
Both the decision of Lietuvos energija to offer the green bonds and the high credit rating assigned to this company under the management of the Ministry of Finance were undoubtedly a trigger among foreign investors of their interest in Lithuania and the investment opportunities in the country. At the same time, it is a good precedent and an incentive to other profitabe, transparent and responsible state-owned entities to take advantage of this financial instrument’, says Vilius Šapoka, the Minister of Finance.
The annual coupon of the bonds of Lietuvos energija will be 2.000 per cent, the bonds were placed at 2.193 per cent yield. The bonds will be settled on 14 July 2017, and redeemed on 14 July 2027. The bonds are to be listed on the Luxembourg and the Nasdaq Vilnius stock exchanges.
 
The green bond proceeds will be primarily used to finance the company’s investments in wind energy, enhancement of efficiency of the electricity distribution grid, as well as energy production from waste and biomass. Lietuvos energija undertook to use the green bond proceeds to fund only the investments related to green energy projects. 
Late in June Standard & Poor's, an international ratings agency, assigned to Lietuvos energija a BBB+ credit rating with a stable outlook. This rating of the state-managed company is the highest among comparable energy utility companies in the Baltic States, and second in the entire energy utilities sector in Central and Eastern Europe.
BNP Paribas and SEB banks were selected as placement agents.