2nd Debentures Issue of EDP Transmissão SP-MG
São Paulo, August 13, 2019 - EDP - Energias do Brasil S.A. ("EDP" or "Company") (B3: ENBR3) announces to its shareholders and the market in general that it has concluded the public offering for distribution of 800,000 simple, debentures, not convertible into shares, issued by EDP Transmissão SP-MG ("EDP SP-MG"), to be of the unsecured type, with an additional personal guarantee, in a single series, with restricted placement efforts, with a nominal unit value of R$1,000.00 (one thousand reais), on October 15, issuance date pursuant to CVM Instruction 476/2009, for the total amount of R$ 800,000,000.00 (eight hundred million reais) and expiring in 2039. The debentures enjoy incentives pursuant to Article 2, Law 12.431 of June 24, 2011, as amended and other applicable norms.
EDP SP/MG, wholly-owned subsidiary of EDP, is responsible for the development, construction and operation of lot 18 of the Transmission Auction 05/2016. On July 16, 2019, EDP SP-MG received the Preliminary Environmental License 610/2019 and awaits the approval of the Installation Licenses, requested to begin construction works.
This issuance has a minimum leverage of 54% of CAPEX, with a total term of 20 years and duration of 10.3 years with a cost of debt of IPCA+4.45% p.a., totaling a post-tax cost of debt of IPCA + 2.81% p.a. to the shareholder. Besides that, the issuance deed provides the possibility of an additional issuance of up to R$ 525 million, which would total up to 90% of the CAPEX financed. In comparison to the return presented in the scope of the auction, the financing structure allows to increase the profitability above the range of IRR of 12% to 14%, according to assumptions disclosed on that date.
With this operation, EDP closes the funding cycle of the lots acquired in the 2016 and 2017 auctions, underscoring its strategy of diversifying sources of competitive finance with the aim of obtaining better returns for their projects and shareholders and mitigating of risks.
Miguel Nuno Simões Nunes Ferreira Setas
Chief Executive and Investor Relations Officer