Hellenic Petroleum (HELPE) on Friday announced the successful completion of a five-year bond issue, with an annual fixed coupon of 2.0 pct while the issue was five times oversubscribed. The company finally raised 500 million euros instead of the initial plan of 400 mllion.
In an announcement, HELPE said that Hellenic Petroleum Finance Plc, a wholly owned subsidiary of the company, has successfully priced the issue of a new 5-year, 500-million-euros eurobond, fully guaranteed by the company, with an annual fixed coupon of 2% and an offering price of 99.41, which are expected to be listed in the Luxembourg Stock Exchange.
Total order book exceeded 1.4 billion euros, with new investors over and above the tender, oversubscribing by approximately 5 times. The strong investor demand, especially from institutional accounts, allowed significant tightening of the yield to maturity vs initial price talk and the upsize of the issue by 25% from 400 to 500 million euros. A significant part of the demand (c. 240 million) came from existing bondholders, a development that highlights the high level of support by existing Group noteholders.
Andreas Shiamishis, CEO of the company commented: "This is a landmark transaction for Hellenic Petroleum Group and, as the first international unrated Greek issuer transaction this year, a vote of confidence to the Greek economy. At 2% coupon and 2.125% YTM this transaction is almost 3% tighter than our retiring 2017 Eurobonds and consequently not only improving the Group's balance sheet profile but also achieving a further reduction of interest cofasts from 2020 onwards. I am particularly pleased to note the strong interest from international institutional investors, that covered 50% of the new money demand of the book."
The proceeds of the new notes will be used, in the sole discretion of the issuer, partly to purchase for cash certain of the issuer's outstanding 2021 Eurobonds, to repay existing financial indebtedness of the Group, and for general corporate purposes. The issue strengthens further the balance sheet of the Group, marking a drop in annual financing costs of around 15 million euros, extends average debt maturity and increases available debt capacity, supporting the implementation of its strategic growth plan. The settlement of the issue and the tender offer is expected to take place on 4 October.
Credit Suisse Securities (Europe) Limited and Goldman Sachs International acted as global coordinators, with Alpha Bank SA, Citigroup Global Markets Limited, Eurobank Ergasias SA, National Bank of Greece SA, Nomura International plc and Piraeus Bank SA acting as joint bookrunners.
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