Total Issues Hybrid Bonds to Finance Ren Strategy

Total SE (NYSE: TOT) has revealed that it has successfully issued perpetual subordinated bonds in the amount of $3.6 billion (EUR 3 billion).

This comprises $1.8 (EUR 1.5 billion) at 1.625 percent coupon for the tranche with a seven year first call date and $1.8 billion (EUR 1.5 billion) at 2.125 percent coupon for the tranche with a 12 year first call date. Total noted that, with a weighted average coupon of 1.875 percent, the issuance that was “very well received” by investors.

Total outlined that the proceeds from the bonds will be used to finance the company’s development strategy, mainly acquisitions in renewables, in particular $2 billion (EUR 1.7 billion) for the acquisition of a 20 percent interest in Adani Green Energy Limited (AGEL).

“These hybrid bonds provide a cost of capital comparable to that of pure players in renewables and is therefore suited to finance acquisitions in this business,” Jean-Pierre Sbraire, Total’s chief financial officer, said in a company statement.

“These bonds will finance in a very competitive way our development in renewables, which is at the heart of our strategy to transform Total into a broad energy company,” he added.

Earlier this month, Total announced the acquisition of a 20 percent stake in AGEL from Adani Group, and a 50 percent stake in a 2.35 GWac portfolio of operating solar assets owned by AGEL, for an investment of $2.5 billion. Also in January, Total announced its decision not to renew its membership of the American Petroleum Institute (API), following a “detailed analysis” of the climate positions of the organization.

According to its website, Total’s ambition is to achieve a renewable power generation capacity of 35 gigawatts by 2025 through the development of its solar and wind energy businesses around the world.

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