Eesti Energia has issued a €400m green hybrid bond, listed on the London Stock Exchange, to invest in projects supporting the development of renewables.
Investors oversubscribed the offer fourfold at more than €1.6bn.
Eesti Energia’s green hybrid bond offer attracted nearly 200 investors from around the world, with two-thirds of the subscribers coming from Europe, including Estonia.
“The strong interest of international investors shows that Eesti Energia Group and our strategy towards a greener future is credible and ambitious,” said member of the management board and chief financial officer of Eesti Energia Group Marlen Tamm.
He added: “The fourfold oversubscription of green hybrid bonds confirm that the company’s plans are sustainable and promising.”
“The exceptionally high demand allowed us to offer bonds at a lower interest rate than we originally planned.
“We were able to tighten pricing by more than 50bps from during the bookbuild process – we closed the offer at a coupon rate of 7.875%, which is comparable to other similar bond offers both internationally and in Estonia.
“We are very happy with the result and strong statement of confidence from the international investor community.”
It is the first green hybrid bond issued in the Baltics to be offered internationally and listed on the London Stock Exchange.
A green hybrid bond means that the company takes responsibility to investors to invest the capital raised by the bond only in green projects.
The hybrid will also benefit from 50% equity content from Moody’s and S&P, whilst being fully equity accounted under IFRS.
In order to classify the bond as green, Eesti Energia has prepared a Green Finance Framework, which has been validated by ISS Corporate Solutions, an independent consultancy, who issued a Second Party Opinion on compliance with the green criteria.