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Guarantor: Vattenfall AB
Rating: A3/A-
Amount: Eu500m
Maturity: April 29, 2024
Issue price: 99.148
Coupon: 5.375%
Spread at launch: 63bp over mid-swaps;
Launched: Friday April 16
Joint books: Barclays Capital, Dresdner Kleinwort Wasserstein, Morgan Stanley
Borrower's comment:
We were happy with the transaction, everyone did their job -- we took the decision to issue the bond on Tuesday and were ready by Friday lunchtime.
The book was oversubscribed to a healthy degree and the bonds were priced in the middle of the price guidance.
The investor response was exactly as we had hoped at the price we came out with and there were a number of new investors who got involved in the transaction. As well as this, the bond has traded well in the secondary market.
There has been talk about the lack of supply at the very long end in the euro market, and as a utility Vattenfall is a natural long term borrower.
We issued a 15 year bond last year and the opportunity to come back with a 20 year at even tighter spreads was appealing.
We decided to wait until after Easter, but chose to do it immediately after as there was a risk of the market being fed by new supply.
Investors' main questions during the conference call centred on what we would use the proceeds of the bond for. The main purpose of issuing 20 year debt was to lengthen Vattenfall's maturity profile and we have no immediate plans for the proceeds.
We have one or two maturities coming up this year and if we have not used it for general corporate purposes we will use it to repay maturing debt.
We have no need to come back to the market this year but we would never say never.
Bookrunners' comment:
Barclays -- This bond from Vattenfall is a great way of reopening the long dated euro corporate market in 2004.
We brought a 15 year from Telecom Italia in January but there hasn't been any significant long dated issuance since last year.
We had been talking to...