Bond issues and bondholders

The bonds were issued as part of the Company’s Euro Medium Term Notes Programme, which was launched in 2016 and last renewed on 7 October 2021 for a total maximum nominal equivalent amount of 6.5 billion euros, in implementation of the resolution passed by the Board of Directors on 15 September 2021. The programme, valid until 6 October 2022, provides for the issue of one or more non-convertible bonds, to be placed with institutional investors operating in Europe.

Initially, the issues allowed us to repay the 2.3 billion euro variable rate Bridge to Bond loan in full as early as April 2017. The Bridge to Bond loan was provided by a pool of 11 banks as part of the financing package signed by Italgas in October 2016 with leading financial institutions. The package also included two variable-rate revolving credit facilities for a committed amount respectively of 600 million euros and 500 million euros with a duration of 3 and 5 years, and a variable-rate term loan with a 3-year duration for an amount of 200 million euros maturing in October 2019.

Following the 250 million euro bond reopening carried out on 30 January 2018 (tap issue of the bond originally launched on 18 September 2017 for 500 million euros, maturing on 18 January 2029 and with a coupon of 1.625%) Italgas then redeemed the 200 million euro term loan in advance in March 2018.

The process of optimising the Company’s financial structure continued in 2019 and 2020 through a series of new bond issues and buy-back transactions that made it possible to maintain an extremely low cost of debt, reduce the refinancing risk and, at the same time, extend the average duration and fixed-rate percentage of its debt. These include the 600 million euro bond, issued on 24 July 2019, maturing on 24 April 2030 and with an annual fixed-rate coupon of 0.875%, the 500 million euro bond, issued on 11 December 2019, maturing on 11 December 2031 and with an annual fixed-rate coupon of 1%, and the 500 million euro bond, issued on 24 June 2020, maturing on 24 June 2025 and with an annual fixed-rate coupon of 0.25%.

In addition, the Liability Management exercise carried out by Italgas in December 2019 relating to the bond issues with an original nominal value of 750 million euros maturing in January 2022 and an original nominal value of 650 million euros maturing in March 2024 was successfully concluded thanks to a take-up rate of over 60% for bonds maturing in January 2022 and over 25% for those maturing in March 2024 (in total, the buyback of shares amounted to approximately 650.7 million euros).

Lastly, on 5 February 2021, Italgas successfully completed the launch of a further dual-tranche 7-year and 12-year bond issue, both at a fixed rate and for an amount of 500 million euros each, with an annual coupon of 0% and 0.5% respectively. On the same date, a buy-back transaction was launched, relating to two bond issues – one for an original nominal value of 750 million euros maturing in January 2022, and one for an original nominal value of 650 million euros maturing in March 2024. The buyback was finalised on 15 February 2021 with a share buyback percentage of more than 58% for the first and more than 20% for the second, and a total nominal value of around 256.0 million euros.

In addition to these loans, the European Investment Bank (EIB) has made loans available totalling 870 million euros up to 31 December 2020. In addition to the loan finalised on 19 December 2017 (20-year term, nominal value of 360 million euros, intended to finance the Network Upgrade project which consists of extending and upgrading the gas distribution network, installing smart meters, as well as modernising and replacing existing assets in order to improve the safety and operational efficiency of the network) and the pre-existing loans (with a nominal value of 300 million euros and 124 million euros, expiring in 2032 and 2035, respectively), there is the 86 million euro 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 the Tuscany Region. 

Alongside this, in January 2018 an Interest Rate Swap derivative transaction expiring in 2024 was finalised, through which the entire amount of the 360 million euro EIB “Gas Network Upgrade” loan was transformed from a variable to fixed rate. On 24 July 2019, on the other hand, an additional Interest Rate Swap was entered into (expiring in November 2029), which brought the EIB “Smart Metering” loan for the amount of 300 million euros to a fixed rate of -0.056%. 

Furthermore, in October 2021 Italgas signed two fixed-rate bank loans linked to the achievement of ESG objectives with leading credit institutions, for a total amount of 500 million euros with duration of 3 years.

Here we present the distribution of bonds by country and type at the time of issue.