SSE (Scottish and Southern Energy plc) has successfully launched an issue of capital hybrid securities, a financial instrument which is perpetual and subordinate to all senior creditors. The dual tranche issue comprises £750m and €500m and has an all-in funding cost to SSE of around 5.6% per annum.
This hybrid capital securities launch in Sterling is the first ever by a UK-listed company, and the launch is the first ever by a utility company which is not state-owned.
In the last 12 months, SSE has also:
- issued a nine-year, £500m sterling bond (September 2009);
- secured a £400m loan facility from the European Investment Bank (March 2010); and
- signed; an amendment agreement with banks to extend and reduce the price of its main Revolving Credit Facility (£900m) by three years, to 2015 (August 2010).
Gregor Alexander, Finance Director of SSE, said:
“This hybrid capital security has been extremely well-received in the financial markets. It will provide another source of attractively-priced funding for us to complement our already well-financed investment programme. At the same time, we remain totally committed to maintaining a strong balance sheet and to financial discipline generally, especially in the assessment of future investment options.”