Colonial has completed the placement of two new debt issues on its bond maturing in November 2029, for a total of €200 million, distributed in tranches of €70 million and €130 million respectively. These issues, which have a BBB+ rating from S&P and are listed on Euronext Dublin, have an average cost of 4.2%. However, due to an effective pre-hedging strategy, the effective average rate is reduced to 1.9%.
The proceeds will be used mainly to repay a previous bond of 187 million euros that matures in October of this year. This strategic move allows Colonial to extend the average maturity of its debt, thus improving its repayment profile to more than five years and consolidating investor confidence in its financial discipline and soundness. In addition, with these operations, the total principal amount of the bond amounts to 500 million euros, offering a fixed annual coupon of 2.5%.
Throughout 2023, the company continued its program of divestments and other financial protection measures that resulted in a 9% reduction of its net debt, bringing it to €4,864 million. These actions have also allowed the company to extend the average maturity of its debt and achieve a loan-to-value (LTV) ratio of 39.5%. In addition, the company reported high liquidity of 2.9 billion euros at year-end, covering all debt maturities until 2027.
Colonial has adapted all its bonds to green bonds, thus marking a trend within the Ibex-35 towards sustainable financial practices. Green bonds are designed to finance projects that have a positive environmental impact, aligning with a corporate responsibility towards environmental sustainability.
