TenneT successfully issues €1.5 billion of bonds

02-02-2010 TenneT, the first cross-border Transmission System Operator in Europe, expects to ssue  € 1.5 billion bond transaction with institutional investors today. The issuance include € 1 billion of senior bonds in two tranches of € 500 million with maturities of 5 and 12 year each and expected spreads (to the relevant mid-swap rate) of 70bps and 100bps respectively. In addition, € 500 million of  perpetual subordinated (hybrid) securities are expected to be issued with an issuer call option after 7 years and an expected spread of 360bps to the 7 year mid-swap rate. 

The bond issues were launched after a pan-European roadshow last week in which TenneT presented its investment plans and details about the acquisition of E.ON's high-voltage grid (transpower).  The issues were heavily oversubscribed: within half an hour aggregate order books amounted to approximately € 11 billion. 

The hybrid bond issue represents the first corporate € issue in Europe since the start of the financial crisis in 2008 and the first ever institutional hybrid issue by a Dutch corporate borrower. 

BNP Paribas, Barclays, ING and RBS act as joint bookrunners on the senior bond. ING and RBS are joint bookrunners on the hybrid bond. The bonds will be listed on the Amsterdam Stock Exchange. The net proceeds of the issue of the bond will be used for general corporate purposes, including investments in the Dutch power grid, and to pay for the acquisition of transpower.

A press release containing further details about the issues will follow later this week.