A closely watched bond loan issue by Greece's Public Power Corp. (PPC), the still dominant electricity provider in the country, is considered to be a vote of confidence in the ATHEX-listed utility's business plan, as well as the Greek economy in general, PPC CEO George Stassis said on Friday.
The power company's top executive for a year and a half said the over-subscription and a low yield were also punctuated by a very high rate of participation by foreign investors (roughly 70 percent), while 50 percent of the issue was covered by high-grade investment funds.
The sustainability-linked bond's return is pegged with meeting specific environmental targets. Specifically, PPC has committed to reducing CO2 emissions by 40 percent in 2022, compared with its emissions in 2019. Failing to do so will be a higher interest rate tacked on to the bond issue.
The once wholly state-owned and run power monopoly has now pledged a reduction of CO2 emissions by 62 percent until 2023. This will be achieved with the closure of all lignite-fired power units, sans Ptolemaida V. The latter will come on line in 2022, and is set for upgrading into a "greener" unit in 2028.
PPC raised 650 million euros from the five-year bond issue at an interest rate of 3.875 percent. Bids exceeded six billion euros, or six times the initial amount requested, 500 million euros.
The drained capital will be used to repay or refinance previous borrowing and capital investments.
PPC's previous foray into the markets was in 2014, when it raised 700 million euros, including 500 million euros via a five-year bond with an interest rate of 5.5 percent.