Hrvatska elektroprivreda (HEP) has offered existing bondholders an early redemption of the company’s bonds totaling $500 million in principal.
HEP, through the Zagreb Stock Exchange, on October 7, offered all existing bondholders a total principal amount of $500 million, with a coupon interest rate of 6 percent, maturing on November 9, 2017, to redeem these bonds. These are bonds issued on November 9, 2012, denominated in dollars, issued in global form and offered in foreign capital markets. The yield on these five-year HEP bonds is 6 percent, which was also the coupon rate, with semi-annual payments. The joint arrangers of the issuance of these five-year HEP bonds were Morgan Stanley and Unicredit/Zagrebačka banka, with Raiffeisen Bank International as co-arranger.
At the time of issuance, HEP announced that the collected funds would be used to repay part of the existing liabilities, thereby strengthening the balance sheet structure and extending the maturity of the total debt. HEP did not respond to inquiries on Friday regarding the reasons for the early redemption of the bonds.
“Poslovni dnevnik,” however, writes that the offer for early redemption of the dollar bonds is just part of a broader refinancing operation, which will extend the maturity structure of HEP’s debt while replacing existing debt with cheaper options. According to the publication, HEP’s financial advisors have already embarked on a world tour to present the new bonds, and this time the target amount is also $500 million.
