Current Report No. 35/2017

Report title: Rating assigned to ENERGA SA’s planned hybrid bond issue

Date: 1 September 2017

Legal basis: Art. 17 sec. 1 MAR – confidential information.

The Management Board of ENERGA SA („Company”) reports that on 1 September 2017 the rating agency of Fitch Ratings („Agency”, „Fitch”) assigned an expected rating of BB+ (EXP) to the planned hybrid bond issue for EUR 250 million. The assignment of this rating is linked to the specific arrangements regarding the hybrid bond issue made by and between ENERGA SA and the European Investment Bank („EIB”).
The Company plans to obtain financing from EIB under the European Commission’s Investment Plan, i.e. the Juncker Plan. The bonds to be issued are subordinated, unsecured bearer bonds offered in the form of coupon-bearing securities. The bond issue calls for two tranches of EUR 125 million each with maturities of 16 and 20 years, respectively, with an early redemption option. The issue’s final parameters will be specified in the agreements between the Company and EIB and in the terms and conditions of the issue.
According to Fitch’s methodology (Non-Financial Corporates Hybrids Treatment and Notching Criteria), for the purpose of calculating leverage ratios, 50% of the financing amount of these bonds will be treated as equity.
The purpose of securing this financing is to execute the investment program in the Distribution Segment involving the modernization and expansion of the ENERGA Group’s distribution assets in 2017-2019.