Centrica plc has today launched its debut bond issue. The transaction is a £400 million Eurosterling bond with a maturity of 2012 and it has been launched as the inaugural issue under the terms of Centrica’s US $2 billion Euro Medium Term Note programme which was signed on 7th September 2001. The coupon on the bonds has been fixed at 5.875% per annum with an issue price of 98.593% giving an all-in cost of funds of around 6% per annum.
The joint lead managers and joint bookrunners of the issue were HSBC and The Royal Bank of Scotland with Barclays, J.P. Morgan and Cazenove acting as co-lead managers. The issue was increased from the initial proposed size of £300 million to meet additional investor demand and the bonds have been placed with a wide range of institutional bond investors.
Phil Bentley, Finance Director of Centrica commented: “This is a very significant transaction for Centrica and I am delighted that we have now inaugurated our Euro MTM programme by establishing a benchmark issue in the Eurobond market. Given the scale of Centrica and having established long term credit ratings of A / A2, it has been our intention for some time to broaden our source of debt capital by establishing a presence in the international bond markets. It is also very pleasing to see that there has been such widespread and strong support for Centrica reflecting the confidence of bond investors in our business and strategy.”