Skip navigation
Newswire

UPDATE 1-Bulgarian Energy Holding prices maiden Eurobond

(Adds pricing details,)

By Davide Scigliuzzo and Tsvetelia Tsolova

LONDON/SOFIA, Oct 31 (IFR/Reuters) - Bulgaria's state-owned energy holding BEH has raised 500 million euros ($688.55 million) through its debut Eurobond issue, collecting more than 1.2 billion euros in orders.

The five-year notes, which carry a 4.25% coupon, priced at a reoffer price of 99.837 to yield 4.287%, which is equivalent to a 320 basis point spread over mid swaps.

This spread was revised in from guidance of 325bp area over mid-swaps announced earlier on Thursday.

Following a series of investor meetings arranging banks Citigroup and Raiffeisen Bank International began collecting orders on Wednesday morning in the low 300s area.

Persisting concerns about the country's political outlook and the debut nature of the transaction were among the factors justifying a slightly higher premium compared to peers, according to a banker who worked on the trade.

The bond priced around 200bp over the Bulgarian sovereign curve, slightly more generous than the premium offered by other energy companies in Central and Eastern Europe.

Bulgaria's 4.25% July 2017s were spotted trading at a spread of around 115bp-120bp over mid-swaps on Wednesday morning, when BEH order books opened.

BEH said in April it was looking to raise 250 million euros, most of which will go to cover a bridge financing provided by Citigroup to cover a loan from BNP Paribas to one of BEH's subsidiaries.

The remainder will be used to finance the building of new gas pipelines and cover deficits within the holding companies.

Rated BB+ with a stable outlook by Fitch, BEH has assets worth 12.8 billion levs ($9.01 billion).

It owns all the major state energy companies, including electricity utility NEK, nuclear power plant operator Kozloduy, the operator of the thermal plant Maritsa East Two, and natural gas providers Bulgargaz and Bulgartansgaz.

REH and Russia's Gazprom launched on Tuesday works on the Bulgarian section of South Stream gas pipeline project, aimed at bringing Russian gas to Europe.

BEH, which will have 50 percent stake in the section, will take 620 million euros loan from Russia to fund its share.

($1 = 0.7262 euros) (Additional reporting by Carolyn Cohn in London, and by Tsvetelia Tsolova in Sofia; Writing by Radu Marinas and Davide Scigliuzzo; editing by Alex Chambers and Julian Baker)