Strong demand for the bond of GEK TERNA – Over-coverage by at least 2 times

LAST UPDATE: 15:51

of Eleni Botas

Demand for the 300 million euro bond of GEK TERNA is particularly high, as according to information the supply has already been exceeded by at least twice, with the process not yet completed.

demand has been recorded according to information the first two days of the public offering which ends today, Friday, at 16.00.

As can be seen from the interest received by the contractors, the bond seems to have aroused the curiosity not only of the – expected – institutional investors, but also of the retail, a fact that is attributed to the emerging in the Greek market “sustainability clause” with which the homology.

It should be noted that the sustainability clause of the bond of GEK TERNA provides that the Group is committed to reduce by 25% the intensity of greenhouse gas emissions by the end of 2025, a goal quite ambitious that to achieve the Group must increase within four years the total installed capacity in Renewable Sources (in offshore and offshore wind farms, photovoltaic parks and storage systems) at 3,000 MW, from 1,300 MW in operation, under construction or ready for construction in Greece, Central and Eastern Europe, available today , carrying out an investment plan that exceeds 2 billion euros.

Otherwise, the interest rate on the bond (which currently has a yield range of 2.30-2.70%) will receive a significant increase, of the order of 0.20%, a possibility that according to analysts makes the bond of GEK TERNA , even more attractive, increasing the demand from small investors.

In addition to the “sustainability clause”, the bond of GEK TERNA brings together a number of other parameters that guide demand. First, the Group has a defensive portfolio of activities, a fact that was proved by what the Group’s management stated in the recent update requested by the Hellenic Capital Market Commission from all listed nine-month results.

As it was characteristically stated “Despite the new conditions created by the Covid-19 pandemic, the Group’s activities continue as smoothly as possible, given that its main areas of activity (RES and Concessions) show significant defensive characteristics. (…)

Specifically, in the Operational Sector of Constructions, although there were delays during the lockdown period, the construction works continue without particular problems within 2021, while there is no risk of non-compliance with conventional schedules as the relevant deadlines are extended respectively.

In the field of electricity from RES, there has been no shutdown of the facilities, while for the investments in the facilities under construction there has been no delay and the estimated time of completion and commissioning of the projects has not changed.

Finally, in the Operational Sector of Concessions, the Group is adequately protected. (…) Following the above and in accordance with the change in the results and key elements of the Group’s financial position for the third quarter of 2021, the fundamental financial figures and prospects of the Group’s financial position have not been materially affected by the the spread of Covid-19 and the evolution of the energy crisis so far “.

At the same time, GEK TERNA has now formed such a portfolio of concessions and clean energy projects, which offers it stable and predictable free cash flows with the horizon of these to increase significantly in the coming years and approach 300 million euros annually, as it will The installed capacity of the RES projects is increased and the existing flows will be added, the ones coming from the newly acquired emblematic concession projects, such as the integrated tourist complex with Casino in Elliniko, the Egnatia Odos and the airport in Kastelli.

But even in the construction activity, which is traditionally viewed with skepticism by investors due to its circularity, GEK TERNA is in an advantageous position, ready to claim the large projects that have been included in the Recovery Fund totaling 32 billion euros, already having a historically high backlog of projects amounting to 4.5 billion euros, ie almost 50% of the total backlog of the country’s major technical companies, and the security offered by the fact that a large part of the projects it builds are its own.

For example, from the total investment of 1 billion euros in the integrated tourist complex with Casino in Elliniko, the 850-900 million euros are the object of the construction arm of the Group, TERNA.