The E.ON Group is one of Europe’s largest operators[1] of energy networks and energy infrastructure offering smart, energy-efficient products and services for private households, communities, businesses, infrastructure, and mobility.

E.ON’s distribution networks and customer solutions businesses support the decarbonisation of society. Between 2022 to 2027, the company, headquartered in Essen, Germany, will invest around €33 billion to expand and upgrade its networks and to offer new services to its customers. This investment programme aims to be fully aligned with the EU Taxonomy (>95% based on EU taxonomy eligible capex). 

E.ON has also pledged to become a greener company itself. To achieve this, the company plans to reduce its Scope 1 and 2 emissions by 75% by 2030 and 100% by 2040; and its Scope 3 emissions by 50% by 2030 and 100% by 2050 (both relative to 2019 baselines).

€1.5 billion green dual tranche attracts diverse range of investors

After a summer break of four weeks without any EUR denominated corporate primary issuances, E.ON prepared to enter the market in late August for their final benchmark funding trade of 2023, a €1.5 billion green dual tranche, ahead of what was going to be a busy supply window in early September.

Selecting NatWest as an Active Bookrunner – as on other transactions including their €1.5 billion green dual tranche last year – E.ON announced the transaction on the back of its H1 results and immediately captured investors’ interest. Combined orders from a diverse range of quality investors for the two tranches peaked at €4.3 billion enabling a price revision for both tranches. The €750 million 5.5-year Green Bond will pay an annual coupon of 3.75%, while the €750 million 10-year carries a 4.00% coupon. 

Looking at origin, investors from Germany, Austria, and Switzerland led demand for both tranches, taking 29% of the allocation of the 5.5-year bond and 46% of the 10-year bond. French investors followed with 26% and 17% respectively, while UK investors took 13% and 14% respectively. Asset Managers took 79% of the 5.5-year tranche and 69% of the 10-year, followed by banks and private banks taking 10% and 20% of the two tranches.

The transaction represented E.ON’s twelfth and thirteenth green tranches overall, and its fifth and sixth tranches under its revised Green Bond Framework (Dec 2021).

NatWest committed to actively contribute to building a greener economy

E.ON’s Chief Financial Officer, Marc Spieker, said: “The high demand from investors underlines again that we are on the right track with our strategy, which is focused on sustainability, digitalisation and growth. E.ON is determined to drive forward the energy transition in Europe. We want to invest a total of €33 billion in the energy transition by 2027. Green bonds are an important financing instrument to do this, and we will continue to use them for our financing in the future.”

Marco Sterly, Director, Capital Markets, NatWest, said: “We congratulate E.ON for attracting high calibre investors and achieving a well-diversified orderbook, underlining E.ON’s credit story in combination with its sustainability credentials. We’re proud and committed to actively contribute to building a greener economy through this and similar green issuances.” 

Dr Arthur Krebbers, Head of Corporate Climate & ESG Capital Markets, NatWest, added: “We’re delighted to have been able to support E.ON again with this landmark green transaction, which helps the firm fulfil its green agenda as well as building out the European green debt markets.”

[1] source: energydigital.com

Case study
2023 Q4

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