Experts from Hrvatska elektroprivreda have recently visited Munich, Frankfurt, Zurich, and London in search of bond buyers. They presented the company’s investment projects and plans.
They offered bonds worth 500 million dollars, without state guarantees. All bonds were placed, and the interest from investment banks was nearly six times higher – around 2.7 billion dollars, although HEP’s rating was recently downgraded.
With this transaction, HEP becomes a globally investment-active company. Half of the funds will go towards paying off unfavorable credit lines, while the other half will be allocated to new investment projects, said Deputy Prime Minister Radimir Čačić during his appearance on Dnevnik 3 HTV.
A favorable interest rate of 6 percent was achieved, which is exceptionally low as the Republic of Croatia has not borrowed at such a rate in the last five years since the onset of the global crisis, but rather at rates of 6.5, 6.375, and 6.25 percent. This is of exceptional quality; it reflects trust not only in HEP but also in Croatia, Minister Čačić expressed great satisfaction.
Hrvatska Elektroprivreda d.d. (HEP), which is a vertically integrated energy company wholly owned by the Republic of Croatia, has set the pricing conditions for the issuance of euro-denominated bonds in US dollars, amounting to 500,000,000.00 US dollars, with a coupon of 6.00 percent, a yield of 6.00 percent, an issue price of 100.00 percent, and a maturity in 2017, it was announced this evening by HEP.
HEP states that the funds from the bonds will be used for refinancing existing debt, financing planned investments, and for general corporate purposes. The joint arrangers of this issuance are Morgan Stanley and UniCredit/Zagrebačka banka, while Raiffeisen Bank International AG is the co-arranger of the issuance, the announcement states.
