Headquartered in Essen, Germany, RWE AG is an international energy company with a focus on power generation. With over 39GW installed (as of Q1/2025), RWE’s portfolio is based on offshore and onshore wind, solar, hydrogen, batteries, biomass and gas, delivering energy in its key markets; Germany, the UK, the Netherlands and the US as well as in several other countries. 

RWE aims to be a driving force in the transition to net zero by providing clean and affordable electricity and reaching net zero by 2040 across its own Scope 1, 2 and 3 emissions. The utility firm announced an investment and growth strategy in 2021, which was updated in 2024, outlining its goal to invest €35bn 2025 – 2030 into generation capacity. 

Re-entering the corporate hybrid bond market with its first hybrid issuance since 2015, RWE mandated NatWest as Sole Structuring Advisor and Bookrunner for a hybrid transaction issued in two tranches of €500 million each, with 30-year maturities and first call dates of 5.25 years and 8 years, respectively.

A pre-issuance virtual roadshow and a number of investor calls generated strong interest, with over 110 investors participating, which led to equally strong investor demand when order books opened. Orders peaked at €5.7 billion for the NC5.25 and €5 billion for the NC8, translating into an exceptional 11.4x and 9.9x oversubscription respectively. Notably, three major investors together placed orders totalling €1bn across both tranches. An additional 24 investors placed orders above €100 million, culminating in a total of over 650 orders across both tranches. Coupons were set at 4.125% p.a. for the first tranche and 4.625% p.a. for the second.

ESG investors played a key role in this transaction: 63% of investors in the NC5.25 tranche and 55% of investors in the NC8 tranche – based on allocation – exhibit strong or moderate ESG commitments (as per NatWest’s proprietary ESG scoring tool). Overall, investors from the UK and Ireland led demand, taking 55% and 47% respectively of the allocation. Looking at investor type, asset and fund managers accounted for 69%/60% of the allocation, followed by central banks and other official institutions with 12%/14%, and insurances and pension funds with 8%/6%.

Issued under of the company’s fully EU Taxonomy aligned June 2023 Green Financing Framework with the SPO from Sustainalytics, RWE will use the net proceeds for eligible green categories, which include renewable energy, battery storage systems and the construction of large-scale batteries, as well as the production and storage of hydrogen.

Hendrik Harms, Senior Manager, RWE, said: “We’re very pleased with the continued investor support we receive, which helps us to achieve our green growth ambitions and to play a key role in creating a world that runs entirely on green energy. Re-entering the hybrid bonds market helps us to further diversify our funding options to finance our investment programme, and we are excited to have attracted such high demand.”

Dmitry Sokolov, Director, Capital Solutions, commented: “We are proud to have played a lead role in the structuring of this unique corporate hybrid transaction: it has Moody’s and Fitch as the two rating agencies, 1 notch uplift in Moody’s instrument rating. As “ordinary subordinated” hybrids become the new market standard after Moody’s hybrid criteria change in 2024, we are committed to continue playing a pivotal role in shaping this evolving segment.”

Marco Sterly, Director, Capital Markets, NatWest, commented: “We congratulate RWE to their very successful re-entry into the hybrid bonds market, achieving record orderbooks and attracting high calibre investors for both tranches. We’re proud and committed to actively contribute to building a greener economy through structuring and distributing green issuances such as RWE’s transaction.” 

Dr Arthur Krebbers, Managing Director, Sustainable Finance Advisory added: “We are proud to support RWE in locking in the green financing they require to effectively support their transition plan and thereby the wider decarbonisation of the energy system. The green hybrid transaction has also helped draw in sustainable and transition-focused investors that are important long-term partners for the company in this strategy.”