Debt & ratings
Our financial strategy aims to consolidate the present debt characteristics - low cost, long average debt duration and a high percentage of fixed rate debt.
The financial strategy is one of the pillars of our 2020-2026 Strategic Plan. The financial efficiency programme we are committed to implementing involves constantly maintaining the debt structure at optimum balance and we intend to preserve a cost of debt (currently below 1%) at excellent level.
We expect that over the course of the Strategic Plan, cash generation will remain strong, able to support both the workforce growth and the distribution of dividends. We also expect that cash flow generation will allow us to maintain our current credit rating.
Debt structure in line with:
- Regulatory profile
- Limited exposure to interest rates
- Financial outperformance
- Control of refinancing risk
- Competitive cost of borrowing, in line with guidance
Solid and efficient debt structure
- Investment grade rating: Moody’s Baa2, Fitch BBB+
- Net financial position at December 31st, 2020: €4.66 billion
- Fixed rate portion at December 31st, 2020: 86.5%
- Average cost of debt just above 1%.
Italgas Net Debt Structure (€ bn)
as at 31 December 2020
as at 31 December 2020
Short / Medium-Long Term Debt
as at 31 December 2020
Debt maturity profile
as at 31 December 2020
Debt maturity profile (as of December 31st, 2020)
|2020||2021||2022||2023||2024||2025||2026||2027||2028||2029||2030||2031||2032||2033||Oltre il 2033|
|Uncommitted credit lines||600||-||-||-||-||-||-||-||-||-||-||-||-||-||-|
|BEI TE 2031||4||8||8||8||8||8||8||8||8||8||8||4|
|Bond 268.5 mln 0.5% Jan 2022||268.5|
|Bond 480.9 mln 1.125% Mar 2024||480.9|
|Bond 500 mln 0.250% Jun 2025||500|
|Bond 750 mln 1.625% Jan 2027||750|
|Bond 750 mln 1.625% Jan 2029||750|
|Bond 600 mln 0.875% Jul 2030||600|
|Bond 500 mln 1% Dec 2031||500|
Italgas made its capital markets debut in 2017 and, since then, we issued bonds for €4.5 billion having the following characteristics:
- €1.5 billion, issued on 19 January 2017 and divided into two tranches, the first with a tenor of 5 years and the second of 10 years, both at a fixed rate, amounting to €750 million each with an annual coupon of 0.5% and 1.625%, respectively;
- €650 million issued on 14 March 2017, due 14 March 2024 with an annual fixed-rate coupon of 1.125%;
- €500 million issued on 18 September 2017, due 18 January 2029 and annual fixed-rate coupon of 1.625%;
- €250 million issued on 30 January 2018, due 18 January 2029 and with an annual fixed-rate coupon of 1.625% (reopening of the bond issue originally carried out on 18 September 2017 for €500 million, due 18 January 2029 and with a coupon of 1.625%);
- €600 million issued on 24 July 2019, due 24 April 2030 and with an annual fixed-rate coupon of 0.875%;
- €500 million issued on 11 December 2019, due 11 December 2031 and with an annual fixed rate coupon of 1%;
- €500 million issued on 24 June 2020, due 24 June 2025 and with an annual fixed rate coupon of 0.250%.
Such bonds were issued under the Company's Euro Medium Term Notes Programme, which was launched in 2016 and last renewed on 20 October 2020 for a total maximum nominal amount of €6.5 billion, as execution of the resolution approved by the Board of Directors on last 5 October 2020. The Programme, valid until 19 October 2021, provides for the issue of one or more non-convertible bonds, to be placed with institutional investors operating in Europe.
Originally, the issues enabled us to fully repay the €2.3 billion floating-rate Bridge to Bond loan as early as April 2017. The Bridge to Bond had been provided by a pool of 11 banks as part of the financing package signed by Italgas in October 2016 with leading financial institutions. The financial set also included two variable rate revolving credit lines, supplied by the same pool of banks for a total committed amount of €600 million and €500 million with a duration of 3 and 5 years respectively, and a 3-year floating rate term loan for a total of €200 million maturing in October 2019.
Later on, after the €250 million reopening bond carried out on 30 January 2018 (tap of the note originally launched on 18 September 2017 for €500 million, due 18 January 2029 and with a coupon of 1.625%) Italgas early repaid the €200 million term loan in March 2018.
The optimization process of the Company's financial structure continued in 2019 and 2020, thanks to a series of new bond issues and buyback transactions that allowed us to maintain an extremely low cost of debt, reduce refinancing risk and simultaneously extend the average duration of the Company’s debt and the percentage at a fixed rate. These transactions include the €600 million bond, issued on 24 July 2019 and maturing on 24 April 2030, having an annual fixed-rate coupon of 0.875%, the €500 million bond, issued on 11 December 2019, maturing on 11 December 2031 and with an annual fixed-rate coupon of 1%, and the €500 million bond, issued on 24 June 2020, maturing on 24 June 2025 and having an annual fixed-rate coupon of 0.250%.
Furthermore, in December 2019 Italgas carried out a Liability Management exercise in relation to both bonds with nominal original amount of €750 million euro due January 2022 and with nominal original amount of €650 million due March 2024, which was positively concluded thanks to a take-up rate of more than 60% for the bonds maturing in January 2022 and more than 25% for those maturing in March 2024 (overall, the repurchase of notes amounted to approximately €650.7 million).
Finally, on 5 February 2021 the Company successfully completed the launch of a further dual-tranche bond issue with maturity 7 and 12 years, both at a fixed rate and amounting to 500 million euro each, with an annual coupon of 0% and 0.5% respectively. On the same date, a buyback operation has been announced in relation on two outstanding bonds isues with a nominal original value of €750 million due January 2022 and with a nominal original value of €650 million due March 2024. The transaction was completed on 15 February 2021 with a repurchase percentage of more than 58% in the first case and 20% in the second one, and a total nominal buyback value of approximately €256.0 million.
In addition to these financing, the Company benefits from the loans made available by the European Investment Bank (EIB) amounting to €870 million at 31 December 2020. Beside to the loan finalised on 19 December 2017 (20-year maturity, nominal value of €360 million, intended to finance a Network Upgrade project which consists in extending and upgrading the gas distribution network and installing smart meters as well as modernize and replace of existing assets in order to improve the safety and operational efficiency of the network) and pre-existing loans (with a nominal value of €300 million and €124 million, maturing in 2032 and 2035, respectively), there is an €86 million EIB loan granted to Toscana Energia in 2016 for the replacement, improvement and extension of the gas distribution network and the installation of advanced metering systems in Tuscany.
Alongside this, January 2018 saw the finalisation of an Interest Rate Swap transaction maturing in 2024, through which the entire amount of the EIB “Gas Network Upgrade” loan of €360 million was transformed from floating rate to fixed rate. On 24 July 2019, a further Interest Rate Swap was entered into (expiring in November 2029), by which the EIB "Smart Metering" loan with amount of €300 million was changed to -0.056% fixed rate from floating.
To learn more, see the sub-page dedicated to the EMTN Programme
ultimo aggiornamento 19 April 2021 07:24 UTC