RWE offers to buy back up to 550 million euros in hybrid bonds
RWE announced today that it will buy back a portion of its outstanding hybrid bonds as part of a tender offer. The offer relates to four RWE hybrid bonds which cannot be cancelled until after 2017.
The buyback is targeting 550 million euros of the total nominal amount outstanding. The further conditions of the buyback have been communicated to the creditors of the affected hybrid bonds in a tender offer memorandum subject to certain offer and distribution restrictions.
"The good business performance in the year underway and the cash flows from the refund of the nuclear fuel tax payments put us in a position to redeem further debt capital. In addition, the planned bond buybacks will reduce RWE's interest burden. In so doing, as announced, we will strengthen our financial position even further," says Dr. Markus Krebber, Chief Financial Officer of RWE AG.
On 7 June 2017, the German Constitutional Court ruled that the nuclear fuel tax levied until the end of 2016 was unconstitutional, thus declaring it null and void retroactively. The refund received by RWE amounted to approximately 1.7 billion euros. RWE announced on 23 June that the company intended to propose to the 2018 Annual General Meeting a one-off special dividend of 1 euro per share in addition to the planned ordinary dividend of 50 euro cents, which would be paid to the shareholders, and to use the remaining funds to increase its financial strength.
In view of its solid financial position and improved equity base following the IPO of innogy, RWE announced in March that it would reduce the volume of hybrid bonds outstanding to 50% and not issue any new hybrid bonds for refinancing purposes in 2017. RWE has already redeemed two hybrid bonds with a combined volume of 400 million Swiss francs so far. A further redemption will be effected on 12 October and relates to the 1 billion US dollar bond.