Johan Gyllenhoff, Vattenfall Group Treasurer, stated:
We are very pleased with this bond issue which met with very strong demand from both international and Swedish investors. It is particularly gratifying that with this transaction Vattenfall has opened up a market for hybrid bonds in Swedish kronor, which is positive for both the Swedish industry and Swedish investors. The advantage of hybrid bonds compared to traditional corporate bonds is that they are typically treated partly as equity and thereby can strengthen the company's financial flexibility.
We have previously announced that we intend to redeem our existing hybrid bond this year and replace it with a new corresponding instrument, so this transaction is in line with what we said.
As with Vattenfall's existing hybrid bond, the new bonds will be accounted for as interest-bearing debt and be subordinated to Vattenfall's other debt instruments. Credit rating agencies Moody's and Standard & Poor's classify 50% of Vattenfall’s hybrid bonds as equity in their credit analysis. The bonds are assigned a credit rating of Baa2 by Moody's and BBB- by Standard & Poor's, which is two and three notches respectively below Vattenfall AB's credit rating for senior debt.