Orsted, the Danish renewable energy giant, has announced its intention to issue a benchmark size of subordinated green hybrid capital securities in euros, with a first reset date after 5.75 years and a final maturity in 3024.
The primary objective behind this issuance is to refinance Orsted’s existing EUR 500 million 2.25 percent EUR hybrid capital securities from 2017, which have their first reset date scheduled for November 24, 2024. Additionally, the move aims to proactively manage Orsted’s hybrid capital portfolio. Concurrently, the company has invited holders of these securities to tender their holdings for repurchase by Orsted, as outlined in a separate company announcement concerning the Tender Offer.
The proceeds generated from this issuance will be directed towards investments in renewable energy projects, aligning with Orsted’s green finance framework. This framework has received a second opinion with a Dark Green shading from Cicero, a recognized authority in environmental finance.
Despite a challenging global economic climate, Orsted maintains strong credit ratings. Moody’s rates the company at Baa1 with a negative outlook, while Standard & Poor’s rates it BBB with a stable outlook, and Fitch rates it BBB+ with a stable outlook. The newly proposed green hybrid capital securities from Orsted are anticipated to receive a rating of Baa3 from Moody’s, BB from Standard & Poor’s, and BBB- from Fitch.
Morgan Stanley has been appointed as Joint Bookrunner and Global Coordinator for this transaction, in conjunction with Citi, Danske Bank, HSBC, and J.P. Morgan acting as Joint Bookrunners. This consortium of financial institutions underscores the significance and scope of Orsted’s capital market activities in financing its renewable energy endeavors.