Power utility PPC, which has just issued a 500 million-euro bond expiring in 2026, is aiming to attract foreign institutional investors – or real-money investors placed in the real economy, not hedge funds – to the issue, which, the corporation hopes, will also enjoy a solid course in secondary-market trading and help establish the company’s clout in capital markets.
PPC began presenting this bond issue to institutional investors yesterday and will continue to do so over the next two days in an effort to maximize the level of participation in the issue, a Sustainability-Linked Bond, the first of its kind to be offered by a Greek company.
The power utility is committing to a 40 percent CO2 emissions reduction by 2022, which if not achieved, will add 50 basis points to the bond’s yield.
The issue’s order book closes on Thursday. A clear picture on the turnout and type of investors drawn to the issue should emerge today or tomorrow, the latest.
PPC’s push to reduce CO2 emissions, which the company has told investors will fall from 23.1 million tons in 2019 to 13.9 million tons in 2022, is based on two key factors, a planned withdrawal of lignite-fired units representing a total capacity of 3.4 GW by 2023 and a change of investment direction focusing on renewables.
Data shows that PPC managed to reduce its CO2 emissions by 56 percent between 2005, when levels were 52.6 million tons, and 2019. A drop to the 2022 objective of 13.9 million tons would represent a 74 percent reduction, compared to 2005. If achieved, such a reduction would exceed the national target of 62 percent.
An improved BB- rating from Fitch late in December was a key factor in PPC’s decision to head to capital markets at this point in time.