SSE is a leading generator of renewable electricity and one of the largest electricity network companies in the UK. The FTSE 100 company develops, owns and operates low carbon infrastructure to support the zero-carbon transition. This includes onshore and offshore wind, hydro power, electricity transmission and distribution grids, and efficient gas-fired generation, alongside energy products and services for businesses.
SSE continues to make progress with the delivery of its £12.5bn Net-Zero Acceleration Programme, set out last November, which will see it double its renewables capacity by 2026. SSE also expects to deliver around a fifth of the UK’s target of 50GW of offshore wind by 2030, requiring investment of approximately £25 billion in the UK alone by the end of the decade.
SSE, which has raised the equivalent of around £2.5 billion under their Green Bond framework to date, making the Scottish company the largest issuer of Green Bonds in the UK corporate sector, asked NatWest to support a new green issuance in the role of Active Bookrunner.
Taking advantage of a quiet issuance window, SSE announced the Green Bond to the market with an expected size of €500 million. The investor response was strong from the start, with the orderbook reaching over €3.8 billion pre price guidance. Demand was such that SSE could upsize the transaction to €650 million and at the same time tighten pricing 20 basis points from the Initial Price Talk (IPT).
More than 260 accounts were involved in the final orderbook, which peaked in excess of €5.75 billion, with demand well-diversified across geographies. Over 70% of the allocation went to the asset management community, which also generated the largest single-tranche orderbook since mid-March this year.
In line with SSE’s Green Bond Framework, proceeds of this issuance will be used to finance/refinance eligible green projects, such as the Viking and Seagreen wind farms, as well as the world’s largest offshore wind farm at Dogger Bank.
Gregor Alexander, SSE’s Finance Director, commented: “Notwithstanding the current challenging market conditions, this new green bond has been extremely well received, and was considerably oversubscribed. This bond is consistent with our commitment to maintaining a strong balance sheet as we continue our Net Zero Acceleration Programme investments, and will enable us to continue to deliver cleaner, more secure and more affordable energy.”
Peter Dooley, NatWest, said: “We’re delighted to have been able to help SSE achieve this positive result in terms of size and pricing, in spite of challenging market conditions, where the significant oversubscription underlines the support for SSE’s strong credentials. Climate and sustainability are at the heart of our purpose-driven strategy, and we’re committed to guiding corporate and institutional customers such as SSE to transition to net-zero and a more sustainable economy.”
Dean Shahfar, NatWest, added: “We were pleased to help SSE fortify their position as the UK’s largest issuer of Green Bonds, while more importantly enabling further progress on their impressive Net Zero agenda. This transaction will contribute to the development of high-quality renewable energy projects across the UK – the keystone of the energy market of the future.”
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