PPC awaiting right time for €500bn Sustainability-Linked Bond

Power utility PPC is all set and waiting for the right time to issue a 500 million-euro Sustainability-Linked Bond, through which it would commit, to investors, to a specified carbon emission reduction.

According to sources, PPC, keeping details on the issue under wraps, has not planned to market an SLB in March, but could, theoretically, do so at any given moment from here on if it deems market conditions are ripe.

An SLB issue by PPC promises to make the company the country’s first to issue a bond incorporating sustainability terms.

Companies that issue SLBs promising carbon emission reductions over an extended period of time represent lower-risk propositions for investors, enabling issuers to achieve better borrowing terms.

PPC does not necessarily expect any great interest rate improvement through an SLB issue, financing officials have pointed out, but, looking further ahead, a solid performance by the utility’s SLB in secondary-market trading would enable the corporation to borrow at a lower cost should it return to capital markets at a future date.

The company’s profile has greatly improved in the eyes of investors. PPC’s share price climbed to €9.05, its highest level since October, 2014, last Thursday, on the eve of the first-round deadline for bids in the sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator.