(Alliance News) - Eni Spa announced Thursday the start of the placement of 7-year senior unsecured convertible bonds, the first in the industry to feature a sustainability-linked structure.

The placement was approved by the board of directors and is aimed at maintaining a balanced financial structure, financing Eni's future needs and broadening the investor base, a note said.

The bonds, for which Eni expects a rating of A- from Standard & Poor's, Baa1 from Moody's and A- from Fitch, and a total nominal amount of about EUR1 billion, will be convertible into Eni ordinary shares listed on Euronext Milan, purchased as part of the share buyback program approved by the shareholders' meeting on May 10.

The conversion price will be set at the end of the placement and is expected to be between 20 percent and 25 percent above the reference price, which will be determined as the weighted average price of Eni ordinary shares recorded on the regulated market of Borsa Italiana on today's day between the time of the start of trading and the setting of the economic terms of the placement.

It is expected that the bonds will pay an annual fixed-rate coupon of between 2.625 percent and 3.125 percent.

The bonds, the company specifies, will be linked to Eni's achievement of the following sustainability targets as of December 31, 2025: reduction of net greenhouse gas emissions associated with Upstream operations to a value of 5.2 or less

MtCO 2 eq, or minus 65 percent from the 2018 baseline level; and increase installed capacity for electricity generation from renewable sources to a value of 5 GW or more.

If one or both targets are not met, "Eni will pay an amount equal to 0.5 percent of the nominal value of the bonds at the payment of the fourth coupon, which will take place on Sept. 14, 2027," the statement said.

The bonds, which are intended exclusively for qualified investors and have a minimum denomination of EUR100,000, will be placed - and their terms will be set - depending on market conditions and offered for subscription at a price equal to 100 percent of their nominal value.

The bonds will be redeemed at maturity Sept. 14, 2030 at par value, subject to prior redemption, conversion, repurchase, and cancellation of the same pursuant to the terms and conditions of the bonds.

Eni's stock on Wednesday closed down 0.3 percent at EUR14.79 per share.

By Chiara Bruschi, Alliance News reporter

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