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Current Report No. 36/2018

11.12.2018 17:20

Signing of the hybrid financing agreements with the European Investment Bank

TAURON Polska Energia S.A. (”Company") informs that the Company and the European Investment Bank (”EIB”) signed the following agreements on December 11, 2018:
a) subscription agreement (”Subscription Agreement”) constituting the basis for issuing hybrid bonds (”Bonds”) with the total nominal value of PLN 400 000 000,
b) project related agreement (”Project Agreement”) defining detailed requirements related to the financing of an investment project.

The proceeds from the Bond issue will be used to cover the expenditures of TAURON Dystrybucja S.A. related to the expansion and upgrading of the power grid infrastructure in 2018-2022.

The bonds to be issued will be subordinated, unsecured, coupon bearer securities to be subscribed by the EIB as part of the European Fund for Strategic Investments launched by the EIB jointly with the European Commission in order to implement the so-called Juncker Plan.

In accordance with the Subscription Agreement the Bonds will be issued in a single series. The Bond issue date has been set as December 17, 2018. The maturity date has been set as 12 years from the issue date, however in accordance with the nature of hybrid financing the first financing period has been defined as 7 years (”1st Financing Period”) during which the Company shall not be able to redeem the Bonds early and the EIB shall not be able to sell the Bonds to third parties early (in both cases subject to the exceptions defined in the Subscription Agreement).

The Bonds will bear a fixed interest rate in the 1st Financing Period, while in the subsequent 5-year financing period (”2nd Financing Period”) the Bonds will bear a floating interest rate (WIBOR 6M), increased by a set margin. The Agreement provides for an option to defer the Bonds interest payment dates until, at the latest, the Bonds maturity date or until the fifth day from the day of taking the decision to pay out the dividend.

The subordinated nature of the Bonds means that in case of a bankruptcy or winding up of the issuer the obligations related to the Bonds shall be repaid only ahead of the liabilities of the Company’s shareholders.

The planned Bond issue will have a positive impact on the Company’s financial stability as the Bonds are excluded from the calculation of the net debt / EBITDA ratio which is a covenant in the Company’s domestic bond issue programs (excluding the TPEA1119 series bonds listed in the Alternative Trading System on the Catalyst market with the maturity date falling on November 4, 2019). Furthermore, the Bonds will be classified by a rating agency as equity in the amount of 50 percent of this financing.

The issue will be carried out after the standard suspending conditions in case of this type of financing have been met.

Legal basis: Art. 17, clause 1 of MAR – inside information


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