A2A has provided itself with a sound financial structure, by pursuing maximum efficiency in optimizing the debt redemption profile through a proactive funding management aimed at seizing all opportunities offered by capital markets.
The focus on an adequate debt structure contributes to position the Group as an "Investment grade" issuer, as assessed by Moody's and Standard & Poor's
- Debt structure
- Debt Capital Markets
- Bonds
- Allocation Reporting
- Rating
Debt structure
A2A can count on a wide range of funding sources obtainable at competitive costs through private lending and capital markets.
Courtesy of an effective sources diversification, A2A is able to meet its foreseeable short and long-term funding needs.
As of 30 june 2023
Debt Breakdown
1H 2023
In 1H 2023, the debt breakdown consists of 80% Bonds and 20% Bank Loans and Other.
In 1H 2023, the debt breakdown consists of 80% Bonds and 20% Bank Loans and Other.
Interest Rate Structure
1H 2023
In 1H 2023, the interest rate structure is 86% fixed rate and 14% variable rate.
In 1H 2023, the interest rate structure is 86% fixed rate and 14% variable rate.
Debt Maturities Breakdown
Considering A2A's debt profile at book values as of 1Q 2023, the following debt maturities are expected: (i) 2023: loans: 334 million euros, bonds: 362 million euros, IFRS 16: 24 million euros (ii) 2024: loans: 341 million euros, bonds: 300 million euros, IFRS 16: 32 million euros (iii) 2025: loans: 94 million euros, bonds: 299 million euros, IFRS 16: 22 million euros (iv) 2026: loans: 75 million euros, bonds: 596 million euros, IFRS 16: 19 million euros (v) 2027: loans: 71 million euros, bonds: 298 million euros, IFRS 16: 16 million euros (vi) 2028: loans: 72 million euros, bonds: 496 million euros, IFRS 16: 12 million euros (vii) 2029: loans: 63 million euros, bonds: 396 million euros, IFRS 16: 9 million euros (viii) 2030: loans: 50 million euros, bonds: 646 million euros, IFRS 16: 7 million euros (ix) 2031: loans: 41 million euros, bonds: 496 million euros, IFRS 16: 6 million euros (x) 2032: loans: 19 million euros, bonds: 494 million euros, IFRS 16: 5 million euros (xi) 2033: loans: 19 million euros, bonds: 495 million euros, IFRS 16: 5 million euros (xii) 2034: loans: 19 million euros, bonds: 492 million euros, IFRS 16: 4 million euros (xiii) 2035: loans: 13 million euros, IFRS 16: 4 million euros (xiv) 2036: bonds: 89 million euros, IFRS 16: 3 million euros (xv) beyond 2036: IFRS 16: 1 million euros.
Considering A2A's debt profile at book values as of 1Q 2023, the following debt maturities are expected: (i) 2023: loans: 334 million euros, bonds: 362 million euros, IFRS 16: 24 million euros (ii) 2024: loans: 341 million euros, bonds: 300 million euros, IFRS 16: 32 million euros (iii) 2025: loans: 94 million euros, bonds: 299 million euros, IFRS 16: 22 million euros (iv) 2026: loans: 75 million euros, bonds: 596 million euros, IFRS 16: 19 million euros (v) 2027: loans: 71 million euros, bonds: 298 million euros, IFRS 16: 16 million euros (vi) 2028: loans: 72 million euros, bonds: 496 million euros, IFRS 16: 12 million euros (vii) 2029: loans: 63 million euros, bonds: 396 million euros, IFRS 16: 9 million euros (viii) 2030: loans: 50 million euros, bonds: 646 million euros, IFRS 16: 7 million euros (ix) 2031: loans: 41 million euros, bonds: 496 million euros, IFRS 16: 6 million euros (x) 2032: loans: 19 million euros, bonds: 494 million euros, IFRS 16: 5 million euros (xi) 2033: loans: 19 million euros, bonds: 495 million euros, IFRS 16: 5 million euros (xii) 2034: loans: 19 million euros, bonds: 492 million euros, IFRS 16: 4 million euros (xiii) 2035: loans: 13 million euros, IFRS 16: 4 million euros (xiv) 2036: bonds: 89 million euros, IFRS 16: 3 million euros (xv) beyond 2036: IFRS 16: 1 million euros.
ESG Debt
1H 2023
In 1H 2023, the debt is 66% ESG Debt and 34% Conventional Debt.
In 1H 2023, the debt is 66% ESG Debt and 34% Conventional Debt.
Debt ratios
| Key Ratios | 1H 2023 | FY 2022 |
|---|---|---|
| Net Debt/Equity (x) | 0.98 | 0.95 |
| Net Debt/EBITDA (x) | 2.60 | 2.80 |
| Interest Coverage Ratio(*)(x) | 0.15 | 0.13 |
| Average Debt Maturity (years) | 5.7 | 5.6 |
| Average Cost of Debt (%) | 2.40% | 1.50% |
| Cash & Cash Equivalent | € 4.0 bn | € 4.3 bn |
| of which: | ||
| Undrawn Credit Facilities | € 1.6 bn | € 1.7 bn |
| Cash | € 2.4 bn | € 2.6 bn |
(*) This ratio is calculated as Net Financial Charges/EBIT
Debt profile
as of 30 june 2023
| Type of Debt (mln €) | Accounting balance 30/06/2023 |
Amount due in | |||||
|---|---|---|---|---|---|---|---|
| 31/12/2023 | 31/12/2024 | 31/12/2025 | 31/12/2026 | 31/12/2027 | beyond | ||
| Bonds | 5,458 | 362 | 300 | 299 | 596 | 298 | 3,604 |
| Bank loans and other | 1,378 | 358 | 373 | 116 | 94 | 87 | 349 |
| TOTAL | 6,836 | 719 | 673 | 415 | 690 | 385 | 3,953 |
Sources: A2A 1H 2023 Results
Interest rate risk
As of 30 june 2023, bank borrowings and other financing obtained by the A2A Group may be broken down as follows:
Financing Structure (mln €)
| Type | 30 june2023 | 31 december 2022 | ||||
|---|---|---|---|---|---|---|
| No derivatives | With derivatives | % with derivatives | No derivativesi | With derivatives | % with derivatives | |
| Fixed rate | 5,729 | 5,869 | 86% | 5,168 | 5,332 | 77% |
| Floating rate | 1,107 | 967 | 14% | 1,721 | 1,557 | 23% |
| Total | 6,836 | 6,836 | 100% | 6,889 | 6,889 | 100% |
Debt Capital Markets
- On 13 May 2021, A2A’s Board of Directors approved the update of the EMTN Programme which includes an increase of the total envelope to € 6bn;
- On 10 November 2016, the Board of Directors of A2A approved a framework resolution for the issue of notes to be issued under the existing EMTN Programme in one or more series or tranches, in one or more times, up to an aggregate amount of € 1bn, by December 31, 2019;
- On 6 November 2014, the Board of Directors of A2A approved and authorized the update of the Programme, increasing the total amount of notes which may be issued thereunder to € 4bn. The Board authorized the issue of notes up to an aggregate amount of € 1bn, by December 31, 2016;
- On 19 September 2012, the Management Board of A2A approved the adoption of a Bond Issue Programme (Euro Medium Term Note Programme) for a maximum amount of € 2bn, listed on the Luxembourg Stock Exchange;
- The adoption of the EMTN is part of the A2A Group’s medium-term financial strategy, which is aimed at lengthening the average life of the Company’s outstanding debt and at maintaining an adequate financial flexibility in order to efficiently manage the future debt maturities, to support the Company’s rating;
- The bonds to be issued on the basis of the Programme are placed to institutional investors;
- On 15 June 2023, A2A’s Board of Directors approved the update of the EMTN Programme increasing its size to € 7bn.
A2A bonds
The currently outstanding bonds issued by A2A Group account for over € 4.5 bn.
It should be noted that Euro Bonds 2034, 2033, 2032, 2031, 2030, 2029, 2028, 2027, 2026 and 2025 and Private Placement 2023 and 2024 were issued under the EMTN Programme and that the current bond rating – where applicable, is different from the issue rating and is equal to the M/L term rating assigned to the Company by S&P and Moody’s.
The bonds of the A2A Group are listed below.
Allocation Reporting
By the moment A2A published two Green Bond Allocation & Impact Reports to allocate the proceeds of the two first Green Bonds issued in 2019 and in 2021.”
Rating
Rating Agencies’ assessment on A2A’s creditworthiness witnesses the sound financial position of the Group.
The view of rating agencies on A2A debt.
A2A rating
| Agencies | View | Current rating | Last change on |
|---|---|---|---|
| Standard & Poor's | M/L Term Rating Short-Term Rating Outlook |
BBB A-2 Negative |
13/05/2022 |
| Moody's | M/L Term Rating Outlook |
Baa2 Negative | 09/08/2022 |
Sustainable finance
In line with the Group's long-term strategy, A2A is committed to achieving an ESG debt target of over 75% by 2026 and above 90% by 2030
For A2A Sustainable Finance is one of the enabling levers of its Strategic Plan 2021-2030.
Following its first Green Financing Framework published in July 2019, A2A has structured a new Sustainable Financing Framework in May 2021.
The Sustainable Finance Framework is fully aligned with ICMA and LMA’s latest principles and it combines both Green/Use of Proceeds and Sustainability-Linked.
Useful resources
Services
A2A S.p.A. - P.I. 11957540153