Snam, record 6 billion demand for bonds. Here's how much they yield

Snam is returning to the market with a two-tranche bond for a total of EUR 1.5 billion after the double transaction launched between September and November last year. As for yesterday's issue, it consists of two tranches. The first is a EUR 500m green bond maturing in February 2028, which pays an annual coupon of 3.375% and has a re-offer price of 99.596% corresponding to a spread of 70 basis points over the benchmark mid swap. The proceeds will be used to finance green projects aligned to the European taxonomy. The second, instead, is a €1 billion sustainability linked bond, with an annual coupon of 3.875% and a re-offer price of 99.504% corresponding to a spread of 120 basis points on the reference mid swap, maturing in February 2034 and with coupons linked to the achievement of Scope 1 and 2 emission reduction targets by 2030 and a premium on capital repayment linked, instead, to the achievement of the Scope 3 emission reduction target by 2032.

"Following the presentation of the strategic plan at the end of January and the recent publication of the new Sustainable Finance Framework, we have successfully placed the first green bond with investments aligned to the European taxonomy and the first sustainability-linked bond linked to scope 3 emissions," commented Snam's cfo, Luca Passa, yesterday. "Our significant commitment to reducing CO2 emissions is also recognised by the first Net Zero Assessment at global level obtained from Moody's, which certifies the alignment of Snam's decarbonisation trajectory with the scenarios envisaged by the Paris Agreement. The transaction recorded a peak total demand of more than €6 billion and represents a further step in our financial strategy to cover the investment plan announced last January, towards the 85% sustainable finance target".

Yesterday's double placement is therefore part of the trajectory designed by the group following the latest strategic plan. Last January, in fact, Snam finalised a new Sustainable Finance Framework that aims to achieve a sustainable finance target of 85% in 2027 and, thanks to the document, updated with the support of Barclays and Bnp Paribas as ESG structuring coordinators, Snam can issue green and sustainability-linked debt instruments in the form of bonds, bank loans, project financing or any other financial instrument in various formats and currencies.

Yesterday's placement follows, then, as mentioned, two transactions completed by Snam in 2023. The first, in late September, led to the issue of the first ever Eu taxonomy-aligned transition bond, convertible into existing Italgas ordinary shares and maturing in 2028, for a nominal amount of EUR 500 million. The second, which dates back to the end of November, was the issue of a second Eu taxonomy-aligned transition bond for a total of EUR 650 million and with a maturity of six years.

Returning to the latest issue, on the other hand, the group of joint bookrunner banks was large: Barclays, Bnp Paribas, Bofa Securities, Goldman Sachs International, Icbc, Imi-Intesa Sanpaolo, Ing, Jp Morgan, Mediobanca, Mizuho, Smbc, Société Générale and UniCredit.