New facility allows uprated ESB to draw down €1.35bn over five years
THE ESB has signed a €1.35bn credit facility with a syndicate of banks, allowing the company to draw down finance for five years.
The facility was provided by lenders including Barclays, BBVA, BNP Paribas, Dankse Bank, RBC, RBS/Ulster Bank, Bank of America/Merrill Lynch, HSBC, Societe Generale, Deutsche Bank, Bank of Ireland, AIB and JP Morgan.
ESB finance director Donal Flynn said the transaction represented a major vote of confidence in the commercial semi-state.
"It will ensure that ESB has access to the bank liquidity it needs over the next five years to support our ongoing investment in Ireland's energy infrastructure," he said.
Unlike a loan, which must be drawn down in full up front, the credit facility allows ESB to draw down borrowings as needed at any stage over the five-year period. It replaces an existing facility, signed in 2010, that was due to expire in the next two years.
Meanwhile, ratings agency Standard & Poor's (S&P) said it had revised the ESB's credit rating to BBB+ (stable outlook) from BBB+ (negative outlook).
It follows S&P's welcomed announcement earlier in the week that it was upgrading Ireland's rating.
S&P has also revised its outlook on ESB's subsidiary Northern Ireland Electricity (NIE) to BBB+ (stable outlook).
Mr Flynn said the revision reflected the company's strong underlying business and careful financial management.
"The ESB is committed to delivering on its cost-reduction plans, which will strengthen the company's financial position, enhance competitiveness and support future performance," he said.
"ESB's business plan is supported by a solid financial structure and good liquidity position, following the successful issue of €1.1bn in Eurobonds in Q3 and Q4, 2012."
The commercial semi-state company is carrying out a cost-cutting programme which will deliver annual savings of €280m over a four-year period to 2015.
Some €140m will is expected to be delivered through reductions in payroll costs.