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Debt

Debt structure

As of 30 June 2021

Debt maturities breakdown

As of 30/06/2021

Debt ratios
Key Ratios 1H2021 FY2020
Net Debt/Equity (x) 0.90 0.84
Net Debt/EBITDA (x) n.a. 2.88
Interest Coverage Ratio(*)(x) 0.07 0.15
Average Debt Maturity (years) 5.5 5.5
Average Cost of Debt (%) 1.70% 2.20%
Cash & Cash Equivalent € 1.45bn € 1.8bn
of which:    
Undrawn Credit Facilities € 0.3bn € 0.8bn
Cash € 1.2bn € 1.0bn

(*) This ratio is calculated as Net Financial Charges/EBIT

Debt profile (as of 30 June 2021)
Type of Debt (mln €) Accounting balance
31/12/2021
Amount due in
31/12/2022 31/12/2023 31/12/2024 31/12/2025 beyond
Bonds 18 511 300 300 298 1,290
Bank loans and other 76 160 160 99 94 790
TOTAL 94 671 460 389 392 2,080

Source: A2A H1 2021 Results

Sustainable finance

Following its first Green Financing Framework published in July 2019, A2A has structured a new Sustainable Financing Framework in May 2021. The Sustainable Finance Framework is fully aligned with ICMA and LMA’s latest principles and it combines both Green/Use of Proceeds and Sustainability-Linked approaches.

Regarding the new Sustainability-Linked component, a set of Key Performance Indicators (KPIs) has been selected in order to fully reflect the two pillars of A2A’s strategic plan, namely Energy Transition and Circular Economy. The selected KPIs (Scope 1 CO2 Emission Intensity; Renewable Energy Capacity Installation; Waste Treated in Group’s Material Recovery Plants) are linked to ESG targets that actively contribute to the achievement of UN SDGs number 7, 11, 12, and 13.

In July 2021, A2A launched its inaugural Sustainability-Linked Bond with a size of € 500mln and maturity 10 years. The bond is linked to the achievement of a specific sustainability performance target related to direct greenhouse gas emissions reduction (Scope 1) per kWh of energy produced. This transaction further highlights the Group’s commitment to fighting climate change while combining strategic plan objectives with sustainability targets. The Sustainability-Linked Bond increased the share of Group’s ESG-labelled debt, which is also a target included in A2A 10-year strategic plan, with a >70% in 2030.

A2A strongly believes that all types of sustainable finance instruments can promote the transition toward a low-carbon economy through (i) the direct financing of green projects and (ii) the long-term commitment toward ambitious sustainability performance targets.

EMTN Programme

  • On 13 May 2021, A2A’s Board of Directors approved the update of the EMTN Programme which includes an increase of the total envelope to € 6bn;
  • On 10 November 2016, the Board of Directors of A2A approved a framework resolution for the issue of notes to be issued under the existing EMTN Programme in one or more series or tranches, in one or more times, up to an aggregate amount of € 1bn, by December 31, 2019;
  • On 6 November 2014, the Board of Directors of A2A approved and authorized the update of the Programme, increasing the total amount of notes which may be issued thereunder to € 4bn. The Board authorized the issue of notes up to an aggregate amount of € 1bn, by December 31, 2016;
  • On 19 September 2012, the Management Board of A2A approved the adoption of a Bond Issue Programme (Euro Medium Term Note Programme) for a maximum amount of € 2bn, listed on the Luxembourg Stock Exchange;
  • The adoption of the EMTN is part of the A2A Group’s medium-term financial strategy, which is aimed at lengthening the average life of the Company’s outstanding debt and at maintaining an adequate financial flexibility in order to efficiently manage the future debt maturities, to support the Company’s rating;
  • The bonds to be issued on the basis of the Programme are placed to institutional investors.

A2A Bonds

The currently outstanding bonds issued by A2A Group account for about € 3.0 bn.

It should be noted that Euro Bonds 2032, 2031, 2029, 2027, 2025, 2022, 2021 and 2019 and Private Placement 2023 and 2024 were issued under the EMTN Programme and that the current bond rating – where applicable, is different from the issue rating and is equal to the M/L term rating assigned to the Company by S&P and Moody’s.

The bonds of the A2A Group are listed below.

 

On July, 7th 2021, A2A successfully launched its inaugural Sustainability-Linked Bond with a size of € 500mln and maturity 10 years. The new transaction received a strong investor response: indeed the total order book peaked at € 1.2bn, implying an oversubscription ratio of 2.5x.

The new bond, which addresses only institutional investors and is issued within the Euro Medium Term Notes Programme, is based on the new Sustainable Finance Framework.

The bond is linked to the achievement of a specific sustainability performance target related to direct greenhouse gas emissions reduction (Scope 1) per kWh of energy produced. This target, which is also included in A2A 10-year strategic plan, commits A2A to cap the Group’s greenhouse gas emissions in 2025 at 296g CO2 per kWh (or lower), in line with the Science Based Target commitment approved in March 2020.

Should A2A fail to reach the target, a 25bps coupon step-up will apply. In the event that A2A reaches the target, the coupon will remain unchanged until the maturity of the bond.

JP Morgan and UniCredit acted as Global Coordinators in the transaction whilst BBVA, BNP Paribas, Citi, IMI-Intesa Sanpaolo, Mediobanca, JP Morgan, Santander, Société Générale and UniCredit acted as Joint Bookrunners. A2A was supported by the legal counsel Orrick whilst the Joint Bookrunners were assisted by Allen & Overy.

 

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual Coupon (%) Issue Date* Maturity Date** Issue Price (%) Reoffer Yield (%) Rating
XS2364001078 500,000,000 500,000,000 0.625 15/07/2021 15/07/2031 99.547 0.672

S&P's:BBB
Moody’s:Baa2

* Date from which interest is paid
** Last date on which interest accrues
 

 

Prospectus for details

A2A, issued its inaugural sustainability-linked bond

 

On 21 October 2020, A2A has successfully launched the issue of a twelve-years bond for a total amount of 500 million euro, exclusively targeted at institutional investors, under its Euro Medium Term Notes Program, last updated on 28 July 2020 (supplemented by a supplement of 20 October 2020).
The notes were placed at an issue price equal to 99.471% and have an annual yield of 0.671%, an annual coupon of 0.625%, with a spread of 85 basis points over the reference mid-swap rate.
At the issue date, this transaction marks the lowest ever coupon for an Italian corporate issuance of more than 10 years.
The bonds are governed by English law and are listed on the regulated market of the Luxembourg Stock Exchange as of October 28, 2020.
The new notes are assigned a rating by Moody's and Standard & Poor's.
The  issue  is  in  line  with  the  financial  strategy  aimed  at  maximizing  the  efficiency  in  terms  of increasing  the  average  duration  of  the  Group’s  debt,  reducing  the average  cost  of  debt  and optimising the debt redemption profile, with a proactive funding management aimed at seizing all the opportunities offered by the capital market.
The placement of the notes is managed by Goldman Sachs International. A2A was assisted by the law firm Legance - Avvocati Associati.

 

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS2250376477 500,000,000 500,000,000 0.625 28/10/2020 28/10/2032 99.471 0.671 S&P's: BBB
Moody’s:Baa2

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Successful Launch Of A 500 Million Euro Bond Issue

On 8 July 2019, A2A has successfully launched the issue of a ten-year green bond for a total amount of 400 million euro, exclusively targeted at institutional investors under its Euro Medium Term Notes Programme.
The notes have an annual coupon of 1.000% and were placed at an issue price equal to 98.693%, with a spread of 105 basis points over the reference mid-swap rate.
The bonds, governed by English law, and listed on the regulated market of the Luxembourg Stock Exchange as of July 16, 2019.
Net proceeds will finance and/or re-finance eligible green projects related to circular economy, decarbonization as well as smart network and services: investments in water and waste treatment, renewable energy development, energy efficiency, sustainable mobility and network upgrade.
The issue is in line with A2A’s financial and sustainable (ESG) strategies, confirming its green vocation and the constant attention to a transparent disclosure towards all its stakeholders.
The placement of the new notes was managed by BBVA, BNP Paribas – Green Structuring Advisor, Mediobanca, UniCredit, as Joint Bookrunners. A2A was assisted by the law firm Legance - Avvocati Associati and the banks by Allen & Overy.

 

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS2026150313 400,000,000 400,000,000 1.000 16/07/2019 16/07/2027 98.693 1.139 S&P's: BBB
Moody’s:Baa2

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Impressive outcome for the inaugural Green Bond of A2A

Green Bond Report - Issuance 2019

On 11 October 2017, A2A has successfully launched the issue of a ten-year bond for a total amount of 300 million euro, exclusively targeted at institutional investors under its Euro Medium Term Notes Programme.

The notes have an annual coupon of 1.625% and were placed at an issue price equal to 98.700%, with a spread of 87 basis points over the reference mid-swap rate.

The bonds, governed by English law, and listed on the regulated market of the Luxembourg Stock Exchange as of October 19, 2017.

The issue will reduce the average cost of debt and, in line with the Group’s financial strategy, will increase the average maturity of debt and optimize the maturity profile.

The placement of the new notes was arranged by Citi Group Markets Limited, Goldman Sachs International, Mediobanca – Banca di Credito Finanziario S.p.A., Société Générale e UniCredit Bank AG. The Company was assisted by the legal advisor Legance – Avvocati Associati.

 

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS1701884204 300,000,000 300,000,000 1.625 19/10/2017 19/10/2027 98.700 1.768 S&P's: BBB
Moody’s: Baa3

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

A2A S.p.A. announces tender offer and the intention to issue new Notes - 11 October 2017

On 18 February 2015, A2A has successfully launched the issue of a ten-year bond for a total amount of 300 million euro, under its Euro Medium Term Notes Programme, which update and increase to a total of 4 billion euro has been approved by the Board of Directors on November 6, 2014.

The notes have an annual coupon of 1.75%, A2A’s lowest coupon ever, and were placed at an issue price equal to 99.221%, with a spread of 110 basis points over the reference mid-swap rate.

The bonds are exclusively targeted at institutional investors, governed by English law, and listed on the regulated market of the Luxembourg Stock Exchange as of February 25, 2015.

The issue – intended for debt repayment – will reduce the average cost of debt and, in line with the Group’s financial strategy, will increase the average maturity of debt and optimize the maturity profile.

The placement of the new notes was arranged by Banca IMI, Barclays, BNP Paribas and UniCredit as Joint Bookrunner.

 

ISIN Code   Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS1195347478 300,000,000 300,000,000 1.750 25/02/2015 25/02/2025 99.221 1.836 S&P's: BBB , Outlook negativo
Moody’s: Baa3, Outlook negativo

* Date from which interest is paid
** Last date on which interest accrues

On 9 March 2017 A2A successfully privately placed with a limited number of qualified investors Euro 300 million notes with a seven-year maturity due in March 2024, issued under its Euro Medium Term Notes Programme.

The notes, governed by English law, have the following characteristics: a 1.25% annual fixed coupon rate; a 99.774% issue price and a 1.284% yield.

The issue of the notes is in line with the Group’s financial strategy, aimed at extending the average maturity of the Company’s debt and optimizing the management of maturities.

The placement of the notes has been managed by Morgan Stanley & Co. International plc.

The notes are listed on the regulated market of the Luxembourg Stock Exchange as of 16 March 2017.

 

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS1581375182 300,000,000 300,000,000 1.25 16/03/2017 16/03/2024 99.774 1.284 S&P's: BBB

* Date from which interest is paid
** Last date on which interest accrues

On December 2, 2013 A2A has successfully privately placed a 300 million Euro tenyear bond under its 3 billion Euro Medium Term Notes Programme approved and increased by the Management Board of A2A on November 7, 2013.

The private placement is in line with the Group’s financial strategy, aimed at extending the average maturity of the Company’s debt stock and optimizing the maturity schedule. Proceeds will be used to reimburse the debt close to maturity.

The notes – with a minimum denomination of 100 thousand Euro, and maturity on December 4, 2023 – have a 4.000% annual coupon rate, and reoffer price of 99.539%. The re-offer yield is 4.057%, corresponding to 210 basis points over the underlying interest rate swap.

The notes are governed by English law. The settlement date is December 4, 2013, when the notes will be listed on the Luxembourg Stock Exchange.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS1000538022 300,000,000 300,000,000 4.000 04/12/2013 04/12/2023 99.539 4.057 Not applicable

* Date from which interest is paid
** Last date on which interest accrues

On December 9 2013, A2A has successfully placed on the European market a 500 million Euro bond due on January 13, 2022, under its 3 billion Euro Medium Term Notes Programme updated and increased on November 25, 2013. The issue was exclusively targeted to institutional investors.

The notes – with a minimum denomination of 100 thousand Euro – have a 3.625% annual coupon rate, and reoffer price of 99.561%. The re-offer yield is 3.688%, corresponding to 190 basis points over the underlying interest rate swap.

The issue – whose proceeds will be used for debt repayment – will allow to reduce the average interest rate on the Group’s debt and, in line with its financial strategy, extend the average maturity of the Company’s debt and optimizing the maturity schedule.

The notes are governed by English law. The settlement date is December 13, 2013, and following that date the notes will be traded on the Luxembourg Stock Exchange.

The placement of the notes was managed by Banca IMI, Credit Agricole, Mediobanca, and UniCredit, as Joint Bookrunners.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS1004874621 500,000,000 500,000,000 3.625 13/12/2013 13/01/2022 99.561 3.688 S&P's: BBB , Outlook negativo
Moody’s: Baa3, Outlook negativo

* Date from which interest is paid
** Last date on which interest accrues

On 2 July 2013 A2A issued a bond that was placed on the international Eurobond market and listed on the Luxembourg bond market.

The seven and half year bond has a nominal value of EUR 500 million and pays an annual fixed-rate coupon of 4.375%.

The bond has been issued under A2A's 2 billion Euro Medium Term Notes Programme and was approved by the Management Board on 12 February 2013.

The placement of the notes has been managed by BNP Paribas, Banco Bilbao Vizcaya Argentaria, Deutsche Bank and Société Générale CIB as Active Joint Bookrunners as well as Banca IMI, Mediobanca and UniCredit Bank as Passive Joint Bookrunners.

The bond ratings are the same as A2A ratings at the issue date.

The net proceeds of the issue has been mainly utilized to repay in advance a portion of A2A existing bonds: 500 M€ due 2014 and 1,000 M€ due 2016.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0951567030 500,000,000 351,457,000 4.375 10/07/2013 10/01/2021 99.323 4.487 S&P's: BBB / A-2, Outlook negativo
Moody’s: Baa3 / P-3, Outlook negativo

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

A2A S.p.A. announces final results and pricing of its tender offer - 2 december 2016

 

A2A S.p.A. announces the results of its tender offer and satisfaction of the new issue condition – 19 October 2017

 

On 23 November 2012 A2A issued a bond that was placed on the international Eurobond market and listed on the Luxembourg bond market.

The seven-year bond has a nominal value of EUR 750 million and pays an annual fixed-rate coupon of 4.5%.

The bond has been issued under A2A's 2 billion Euro Medium Term Notes Programme and was approved by the Management Board on 15 November 2012.

The placement of the notes has been managed by Banca IMI, BNP Paribas, Mediobanca and UniCredit Bank, as active Joint Bookrunners, as well as Banca Akros – Gruppo BPM and Centrobanca as passive Joint Bookrunners.

The bond ratings are the same as A2A ratings at the issue date.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0859920406 750,000,000 0 4.500 28/11/2012 28/11/2019 99.718  4.548 S&P's: BBB / A-2, Outlook negativo
Moody’s: Baa3 / P-3, Outlook negativo

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

A2A S.p.A. announces final results and pricing of its tender offer - 02 december 2016
 

A2A S.p.A. announces the results of its tender offer and satisfaction of the new issue condition – 19 October 2017

On 28 November 2013 LGH issued a bond that was placed on the international Eurobond market and listed on the Luxembourg bond market.
The issue has a nominal value of EUR 300 million and a five-year maturity. It pays an annual fixed-rate coupon of 3.875% and provides a Change of Control Put in the event of a change of control of the company. Following the acquisition by A2A S.p.A., this option was exercised by some bondholders for a total amount of 500 thousand euro, reimbursed on October 12, 2016.
The placement of the notes has been managed by Banca IMI and Unicredit Bank.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0951567030 300,000,000 0 3.875 28/11/2013 28/11/2018 99.444 4.000 Fitch: BBB-

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Information prospectus

On 10 August 2006, ASM issued its second bond. It was not, however, placed on the market but wholly acquired by Aflac , one of the biggest US insurance groups and the largest in Japan.
The bond has a 30-year maturity with a half-yearly coupon; it is worth a total of around EUR 95 million and carries an annual fixed coupon of around 5.4%.

The loan, which was initially issued in yen (14 billion) with a yen fixed rate (3.2%), was converted into a euro-denominated bond via a cross currency swap.

The issue was launched with the support of Merrill Lynch rating agency Standard & Poors awarded the bond an A+ rating, the same rating given to ASM

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0261846066 98,000.000 98,000.000 5.405 10/08/2006  10/08/2036 100 n.d. A+

* Date from which interest is paid
** Last date on which interest accrues

On 27 October 2009 A2A issued a bond that was placed on the international Eurobond market and listed on the Luxembourg bond market.

The seven-year bond has a nominal value of EUR 1 billion and pays an annual fixed-rate coupon of 4.5%.

The placement was handled by investment banks Banca IMI, Banco Bilbao (BBVA), BNP Paribas, Calyon, Mediobanca

The bond ratings are the same as A2A ratings at the issue date.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0463509959 1,000,000,000 0 4.500 02/11/2009 02/11/2016 99.255 4.627 S&P: BBB+ Credit Watch Negative

Moody’s: A3 Stable

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Information prospectus Euro Bond 2016

On 28 May 2004, ASM issued a bond that was listed on the Luxembourg market.

The issue has a nominal value of EUR 500 million and is made up of bearer bonds with a nominal value of EUR 100,000. It has a ten-year maturity and fixed coupon of 4.875%

Investment banks Barclays, Merrill Lynch Banca IMI placed the issue. Rating agency Standard & Poors awarded the bond an A+ rating, the same rating given to ASM

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0193337796 500,000,000 0 4.875 28/05/2004 28/05/2014 99.304 n.d. A+

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Information prospectus

On 17 October 2003 AEM issued a bond that was placed on the international Eurobond market and listed on the Luxembourg bond market.

The ten-year bond has a nominal value of EUR 500 million and pays an annual fixed-rate coupon of 4.87%.

The placement was handled by investment banks JP Morgan, Mediobanca e Unicredit Banca Mobiliare. Standard & Poors awarded a credit rating of BBB to the issue, the same rating as that given to the issuer, AEM.

ISIN Code Issued Amount (euro) Amount Outstanding (euro) Annual coupon (%) Issue date* Maturity date** Issue price (%) Re-offer Yield (%) Rating
XS0179091425 500,000,000 0 4.875 30/10/2003 30/10/2013 99.767 n.d. BBB

* Date from which interest is paid
** Last date on which interest accrues

 

Prospectus for details

Information prospectus

Rating

The view of rating agencies on A2A debt.

A2A rating
Agencies View Current rating Last change on
Standard & Poor's M/L Term Rating
Short-Term Rating
Outlook
BBB
A-2
Stable
20/07/2015
Moody's M/L Term Rating
Outlook
Baa2
Stable
27/04/2018

Interest rate risk

As at 31 December 2020, bank borrowings and other financing obtained by the A2A Group may be broken down as follows:

Financing Structure (mln €)
Type 31 December 2020 31 December 2019
No derivatives With derivatives % con derivati senza derivati With derivatives % con derivati
Fixed rate 3,143 3,333 74% 2,649 2,892 80%
Floating rate 1,355 1,165 26% 962 719 20%
Total 4,498 4,498 100% 3,611 3,611 100%

A2A 2021 Investors Presentation