Vattenfall Issues USD 400 Million in Hybrid Bonds

Swedish utility Vattenfall has today priced a hybrid bond issue of USD 400 million (approximately SEK 3.5 billion), the proceeds of which will be used for general corporate purposes.

This is Vattenfall’s first ever hybrid bond denominated in USD, placed under Regulation S outside the U.S.

As with the company’s existing hybrid bonds, the new bonds will be accounted for as interest-bearing debt and be subordinated to Vattenfall’s other debt instruments. Vattenfall expects rating agencies Moody’s and Standard & Poor’s to classify 50% of the hybrid bonds as equity when calculating credit ratios.

The company expects the bonds to be assigned a credit rating of Baa2 by Moody’s and BB+ by Standard & Poor’s, which is two and three notches respectively below Vattenfall AB’s credit rating for senior debt.

The settlement date for the issue will be on 19 November 2015. Deutsche Bank acted as Sole Structuring Bank and Sole Bookrunner.

Image: Vattenfall

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