Eesti Energia borrows 300 million for financing domestic investments

The Eesti Energia bond issue that took place today was 2.2 times oversubscribed. Eesti Energia will issue 300 million euros worth of bonds, with a redemption date of 2018 and an interest rate of 4.25%. The proceeds will be used to finance Eesti Energia's investments.

The intention to issue bonds in nine European financial centres was introduced in the course of a series of meetings with investors that started in Tallinn last week. Eesti Energia's CFO Margus Kaasik said interest outstripped expectations and thus an actual transaction was reached only this afternoon.

"We have received a fairly rare opportunity to bring to Estonia from the international capital market an amount of additional resources for financing domestic projects. The possibility of issuing bonds also means a chance to secure more favourable loan conditions for Eesti Energia," said Kaasik in comments on the transaction.

"Eesti Energia has major investments in progress – for instance, upgrading the distribution grid, building a power plant and oil production centre, which are so capital-intensive that the company's own resources will not be enough," said Kaasik.

A total of 96 investors will take part in the transaction, including funds, banks and insurance companies. Of the investors, 39% are from Scandinavia and Estonia, 20% from Switzerland, 12% from Austria, 11% from France, 10% from the United Kingdom and 8% from elsewhere in Europe.

Eesti Energia has been using bond markets for financing since 2002, and today's bond issue is the third for the company. The value of the transaction in 2002 was 200 million euros and in 2005, 300 million euros: The underwriters of this transaction are Deutsche Bank AG and Nordea Markets, and the bonds will be listed on the London exchange.

Eesti Energia's credit rating has been accorded a stable outlook at a level of Baa1 (Moody´s) and BBB+ (S&P).

Eliis Vennik
Eesti Energia
Press representative
715 12 18
57 830 756
[email protected]