ISSN 2330-717X

BG Group Issues US$1.57 Billion In Hybrid Bonds

By

BG Group issued Monday hybrid bonds totalling US$1.57 billion, another step in the execution of its approved funding plan to support the company’s investment programme. The bonds, which comprise tranches of £600 million and €500 million, mature in 2072.

The bonds are long-dated, subordinated securities which are treated partially as equity by credit rating agencies, further strengthening the Group’s balance sheet. BG Group has a right to repay the bonds on certain dates, the first occurring in November 2017.

The coupon on both tranches is 6.5% per annum. The settlement of the issue will occur on 25 June 2012, subject to customary settlement conditions.

BG Group Executive Director & Chief Financial Officer Fabio Barbosa said, “We are pleased with this issue of hybrid bonds which have been well received by investors, with both the sterling and euro books substantially oversubscribed. The bonds add further diversification to the Group’s funding types and help underpin investment in our significant growth opportunities, such as those in Brazil and Australia. During this capital intensive period, we remain committed to a strong balance sheet and the success of today’s issue demonstrates a clear endorsement of our plans by investors.”

Since the beginning of the year, BG Group said it has also made good progress with its capital release programme with agreements in place for over 70% (around $3.6 billion) of the $5 billion two-year target. This was achieved through asset sales in Brazil (Comgás), Chile (GNL Quintero), the Philippines (San Lorenzo and Santa Rita) and Australia (Senex).

The company has also secured an agreement with Export Development Canada for a credit facility of $500 million and received initial approval from the Brazilian Federal Development Bank for up to $1.8 billion in long-term finance.


Thanks for reading Eurasia Review. For more of our reporting make sure to sign up for our free newsletter!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.