Saturday 16 December 2017

Bord Gais is latest Irish firm to seek funding with bond auction

Donal O'Donovan

Donal O'Donovan

BORD Gais plans to raise at least €500m in new debt financing from investors as it becomes the latest Irish name to hit the bond markets.

The planned bond will be the utility company's first new bond since 2009. Some of the cash raised is likely to be used to redeem €550m of bonds due to be repaid in 2014 ahead of time.

The interest rate on those 2014 bonds is 5.75pc and the IOUs are trading at 106pc of face value on the international markets, so Bord Gais will have to pay more than face value to redeem the paper ahead of schedule.

The state-owned company has hired six banks to arrange its latest "benchmark" capital raising on the bond market, it said in a note released to the Stock Exchange.

The term "benchmark" implies that the new debt deal will be at least €500m.

Bord Gais is hoping to tap into some of the same €6bn of investor demand seen last week when the ESB issued an earlier bond.


The gas and electricity utility has hired Barclays Bank, BNP Paribas, Danske Bank, HSBC Holdings, Canada's RBC and RBS to manage the deal.

A conference call was held yesterday with investors, and a new bond could be auctioned as early as today.

Meanwhile, Bord Gais's board of directors is understood to have drawn up a shortlist of potential replacements for outgoing chief executive John Mullins. This is despite fears that the €250,000 a year cap on public sector pay has made it difficult to attract applicants for the role.

Interviews are expected to get under way shortly.

Any new boss faces a huge task at the company. It has been ordered to find a buyer for its Bord Gais Energy unit – the retail and power generation parts of the company – in the first three months of next year.

The year will also see Bord Gais begin the work of setting up Ireland's first national water company. That includes taking control of water infrastructure from 34 local authorities and beginning the process of introducing water meters in homes across the country.

Irish Independent

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