January 5, 2018 / 1:23 PM / in a year

REN readies sub-benchmark for M&A financing

LONDON, Jan 4 (IFR) - REN Finance will begin a European roadshow on Monday to help it garner investor interest ahead of a €300m no-grow 10-year to refinance a recent M&A deal.

The meetings will end on Wednesday for a deal expected as soon as Thursday.

REN last came to market in October 2016 for a €200m tap of its €300m 2.5% February 2025s, which priced at 135bp over mid-swaps. The CSPP-eligible paper was trading at 60bp over on Friday, according to Tradeweb.

One lead said part of the proceeds would go towards refinancing REN’s €532m acquisition of the natural gas distribution network from EDP Energias de Portugal, which closed in October last year. At the time, REN said it would fund the deal with a €250m capital increase and debt, including a bridge loan.

After the M&A was first announced in April, Moody’s maintained its Baa3 (stable) ratings, saying REN has the ability to absorb the acquisition and maintain its financial profile.

The borrower, also rated BBB- positive by S&P and BBB stable by Fitch, has mandated Barclays and Deutsche Bank as joint global coordinators, and Banco BPI, Haitong Bank, ICBC Standard and Millennium BCP as joint bookrunners.

The issue will come less than a month after Portugal received a two-notch upgrade to BBB from Fitch, meaning it is now investment grade with two of the three major rating agencies.

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