Czech CEZ launches EUR750m 7-year bond

CEZ, the largest energy company in the country, launched a 7-year EUR-denominated bond, tapping markets for EUR750m, according to an official announcement. The bond has a coupon rate of 0.875% and is part of CEZ’s Euro Medium-Term Note Programme. Demand was considerable, reaching EUR2.75bn or almost four times the desired amount. Martin Novak, CEZ’s CFO, said that it was the largest issue that a company based in the CEE had offered this year. As the initial announcement showed, the negotiated price was 110bps above the mid-swap rate.

CEZ is looking for financing in order to initiate some large projects, among them the construction of a new unit in the Dukovany nuclear plant. It has launched an attempt to divest from its assets in Eastern Europe, though its attempts to sell its Bulgarian assets have been currently blocked by Bulgarian authorities. CEZ is currently appealing the Bulgarian competition authority’s decision to block the sale of its Bulgarian assets to Eurohold, a financial firm, for EUR335m. CEZ also has plans to sell assets in Romania, Turkey and Poland, though official plans have been announced only for Romania at this stage. The Czech government has been pressing CEZ not to seek for additional investors in the nuclear unit project, in order to keep as much control as possible.

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