On 26 November 2019, EDF issued a euro-denominated 500 million hybrid bond, with a 3.00% coupon and an 8-year first call date.
This offering shows the Company’s strong commitment to financing through hybrid securities, which are a permanent part of its capital structure. The Company pro-actively manages its stock of hybrid bonds: the funds resulting from this issue were mainly used to finance the partial repurchase of several outstanding series of hybrid bonds, and for general corporate purposes of the Company and the EDF Group.
On 26 November 2019, EDF issued a cash tender offer for redemption of the following hybrid bonds:
The Company also exercised its option to fully redeem the €1.25 billion Reset Perpetual Subordinated Notes, of which €338.2 million was outstanding, on 29 January 2020. As the redemption was certain, EDF reclassified these items of additional equity as financial liabilities at 31 December 2019 in the amount of €338.2 million (see note 33).
Consequently, taking into account the issuance on 26 November 2019 of a €500 million hybrid bond with 3.00% coupon and an 8-year first call date (see note 2.2.2), these transactions reduced the total stock of hybrid instruments in EDF’s balance sheet by approximately 8% to €9.8 billion while generating a saving net of interest estimated at around €44 million in 2020 and around €58 million from 2021.
On 27 November 2019, EDF raised $2 billion through issuance of a senior bond with 50-year maturity and a fixed coupon of 4.50%. This transaction demonstrates the Group’s capacity to attract a highly diversified investor base at the long end of the credit curve.
In addition, on 2 December 2019, EDF raised €1.25 billion through issuance of a senior bond, with 30-year maturity and a fixed coupon of 2.00%. This is the largest amount raised by a corporate issuer on this maturity in the Euro market.
On 4 April 2019 EDF’s Board of Directors decided on the principle of an employee shareholding operation. This was carried out by the sale of 7,704,974 existing shares by the State to EDF, which immediately sold them to eligible employees, former employees and retired employees. Consequently this operation does not constitute a capital increase for EDF SA.
The offer included a “leveraged” formula guaranteeing personal contributions in euros, and a “classic” formula. It was carried out through a French employee savings fund (Fonds commun de placement d’entreprise, or FCPE). A matching employer’s contribution was offered to employees under the “classic” formula.
The shares offered were ordinary shares, listed on Euronext Paris (Compartment A), with current dividend rights. Being acquired through the subscription of shares in a FCPE of the EDF Group savings plan (PEG), they are subject to a mandatory holding period of 5 years ending 16 July 2024, except in cases of early release provided for by the regulations. Voting rights will be exercised by the Supervisory Board of the FCPE.
The sale price for these shares was fixed on 20 June 2019. It included a discount of 20% on the reference price based on the volume-weighted average price of EDF shares traded on Euronext Paris for the twenty trading days preceding the day when the price was set.
The shares were delivered on 16 July 2019.
In the 2019 financial statements, this operation led to recognition in personnel expenses of an amount of €6 million corresponding to the matching employer’s contribution and the forfait social corporate social contribution, and recognition in exceptional expenses of an amount of €11 million corresponding to the 20% discount.
The multi-year energy programme (PPE) is a tool for the energy policy introduced by the French law on the energy transition for green growth adopted in 2015.
In principle, the PPE covers two successive five-year periods. The first PPE published in October 2016 departed from this rule by setting out two successive periods of three and five years respectively, 2016-2018 and 2019-2023. The revised PPE, which is not yet finalised, will cover the periods 2019-2023 and 2024-2028.
For nuclear electricity generation, the French government has now set the deadline of 2035 for reaching the objective of a 50% nuclear share in the national electricity mix.
To achieve this, 12 nuclear reactors will have to be shut down by 2035, in addition to the closure of the two Fessenheim reactors in the spring of 2020. The reactors concerned will be shut down when their fifth 10-year inspection is due, except for two reactors which will be shut down earlier in 2027 and 2028, provided the criterion of secure supply is respected. Two additional reactors could also be shutdown in 2025-2026 if certain conditions relating to electricity prices, secure supply and European electricity market trends are fulfilled.
