Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  National Grid plc    NG.   GB00BDR05C01

NATIONAL GRID PLC

(NG.)
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsAnalyst Recommendations

National Grid : Investors ignore 'Corbyn risk' to grab UK power grid debt

share with twitter share with LinkedIn share with facebook
share via e-mail
0
09/10/2019 | 07:32am EDT
FILE PHOTO: Migrating starlings fly at dusk past electricity pylons silhouetted by the sunset of a clear autumn evening in the Kent countryside,  in Graveney, Britain

LONDON (Reuters) - Britain's National Grid Electricity Transmission (NGET) drew heavy demand with its 700 million pounds ($864 million) bond issue on Monday, as investors rushed to grab the low yield despite nationalisation worries.

National Grid, parent company for the main national power distributor, is earmarked for nationalisation by the Labour Party led by Jeremy Corbyn if it wins an election expected later this year.

Lawmakers are for now blocking Prime Minister Boris Johnson's request for an early election, but only until they are satisfied they have stopped a no-deal divorce with the European Union, after which a vote looks inevitable.

NGET acknowledged in the bond's prospectus that potential nationalisation could have a "material" impact on operations. Yet with rates and government bond yields at some of their lowest levels ever, it had double demand for its target.

In the end, it issued a 1.375%, 300 million pound, seven-year bond and a 2%, 400 million pound, 19-year bond, said a lead manager. Pension funds starved of long-dated assets came in for the longer bond in particular.

"This is a fantastic time to issue debt given the really big drop in the underlying rates and the potential for more central bank stimulus," said the source, who asked not to be named.

National Grid did not immediately reply to a request for details.

Central banks around the world have been easing policy in response to a darkening outlook for the global economy.

Most notably, the European Central Bank is likely to announce corporate bond purchases this week, an expectation that has already pushed nearly half of European corporate debt into negative-yielding territory.

The Bank of England is also expected to cut rates in the event of a disruptive outcome from Brexit negotiations, and perhaps most significantly rate cuts from the United States are being priced in as well.

"FORGIVING INVESTORS"

As a result, there has been a record amount of corporate bond issuance over the past fortnight or so, bankers say. Last week, there was 34 billion euros of corporate bond issuance in Europe and $75 billion in the United States, a new record by one estimate.

"Investors are very forgiving at the moment," said one banker who has managed National Grid's debt issuance in the past, though not this deal.

"I think the Corbyn risk is substantial with a general election likely, but the market is not trading on credit fundamentals. It is a market pumped up on central bank stimulus."

In May this year, the Labour Party unveiled plans to take the National Grid into public ownership, saying it wants to create a National Energy Agency for transmission infrastructure.

In its bond prospectus, the company warned of the potential downside of nationalisation for operations, cashflows and opportunities to develop businesses. But this did not mean National Grid or the National Grid Group would be unable to comply with obligations, it said.

However, Gordon Shannon, portfolio manager at TwentyFour Asset Management, said nationalisation would put serious doubts over National Grid plc's debt repayments. "A Corbyn-led government is not as remote a possibility as investors might hope," he said in a note on Friday.

He also highlighted that National Grid faces a potential fine from energy regulator Ofgem of up to 140 million pounds after Aug. 9 blackouts.

(Reporting by Abhinav Ramnarayan; Editing by Andrew Cawthorne)

By Abhinav Ramnarayan

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on NATIONAL GRID PLC
01:11aNATIONAL GRID : Former National Grid boss 'heads for City Fibre'
AQ
09/13NATIONAL GRID : Notice of Redemption
PU
09/13NATIONAL GRID : 'Mary' the tunnel boring machine completes epic journey under th..
AQ
09/12NATIONAL GRID : ‘Mary' the tunnel boring machine completes epic journey un..
PU
09/11UK's Stanlow oil refinery reports outage after power cut
RE
09/11NATIONAL GRID : urges security review after cut
AQ
09/10NATIONAL GRID : Investors ignore 'Corbyn risk' to grab UK power grid debt
RE
09/09NATIONAL GRID : Enhances Bill Payment Options for Its Seven Million Customers
PU
09/03NATIONAL GRID : Publication of a Prospectus
PU
09/03NATIONAL GRID : NGG Finance plc Announces Tender Offer Results
PU
More news
Financials (GBP)
Sales 2020 15 701 M
EBIT 2020 3 581 M
Net income 2020 1 977 M
Debt 2020 27 936 M
Yield 2020 5,85%
P/E ratio 2020 14,5x
P/E ratio 2021 13,7x
EV / Sales2020 3,63x
EV / Sales2021 3,67x
Capitalization 28 989 M
Chart NATIONAL GRID PLC
Duration : Period :
National Grid plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends NATIONAL GRID PLC
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 919,05  GBp
Last Close Price 832,90  GBp
Spread / Highest target 23,7%
Spread / Average Target 10,3%
Spread / Lowest Target -3,95%
EPS Revisions
Managers
NameTitle
John Mark Pettigrew Chief Executive Officer & Executive Director
Peter Oliver Gershon Non-Executive Chairman
Andrew Jonathan Agg Chief Financial Officer & Executive Director
Adriana Karaboutis Chief Information & Digital Officer
Paul Golby Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
NATIONAL GRID PLC8.99%35 997
ORSTED AS47.67%39 796
SEMPRA ENERGY31.02%38 918
ENGIE8.70%36 106
ELECTRICITÉ DE FRANCE-24.24%35 037
PPL CORPORATION9.88%22 484