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The issuance of a new 5-year, €500m Eurobond, with an annual fixed coupon of 2% and an offering price of 99,41, was completed successfully. As announced by HELLENIC PETROLEUM FINANCE PLC (a wholly owned subsidiary of Hellenic Petroleum S.A.), the new notes are expected to be listed in the Luxembourg Stock Exchange.
The total order book exceeded €1.4bn, with new investors over and above the tender, oversubscribing by approximately 5 times, which allowed significant tightening of the yield to maturity vs initial price talk and the upsize of the Issue by 25% from €400m to €500m. A significant part of the demand (c. €240m) came from existing bondholders of HPF’s 4.875%, guaranteed by the Company, October 2021 bond who participated in the tender offer process which was launched on 23th September 2019 and was successfully closed on 27 September 2019; this highlights the high level of support by existing Group noteholders.
Mr. Andreas Shiamishis, CEO of the Company commented: “This is a landmark transaction for Hellenic Petroleum Group and, as the first international unrated Greek issuer transaction this year, a vote of confidence to the Greek economy. At 2% coupon and 2.125% YTM this transaction is almost 3% tighter than our retiring 2017 Eurobonds and consequently not only improving the Group’s balance sheet profile but also achieving a further reduction of interest cofasts from 2020 onwards. I am particularly pleased to note the strong interest from international institutional investors, that covered 50% of the new money demand of the book.”
The proceeds of the New Notes will be used, in the sole discretion of the Issuer, partly to purchase for cash certain of the Issuer’s outstanding 2021 Eurobonds, to repay existing financial indebtedness of the Group, and for general corporate purposes.
The Issue strengthens further the balance sheet of the Group, marking a drop in annual financing costs of c.€15m, extends average debt maturity and increases available debt capacity, supporting the implementation of its strategic growth plan.
The settlement of the Issue and the tender offer is expected to take place on 4 October 2019.