Cepsa elaborates on its strategy of reducing its gross debt and improving its leverage ratios. To this end, the Spanish oil company has launched a bond repurchase for up to 100 million euros. Specifically, the group led by Maarten Wetselaar has made an offer to the holders of the bond issue that it placed to mature in February 2028 and whose total amount reaches 500 million euros.
In this way, the company continues to optimize its financial strength, since at the end of the first half of 2022 it had a liquidity position of 3,909 million euros, thereby covering 4.2 years of future debt maturities.
Between 2019 and 2020, Cepsa executed three bond issues on the Irish Stock Exchange for a total of 1,500 million euros (500 million of each) with maturities between 2026 and 2028 and were rated investment grade by Moody’s, S&P and Fitch.
The company is now launching the partial repurchase of the second placement it made, in February 2020. It is the bond with the lowest annual coupon of the three. Specifically, it set an interest rate of 0.75% and maturity on February 12, 2028. Demand exceeded supply by more than 3.5 times and received orders from more than 190 investors from 25 countries. The repurchase offer is initially extended until September 20 and it is expected that in a context of rising interest rates it will be fully covered.
Cepsa issued bonds for the first time in May 2019 with the aim of diversifying its sources of financing, lengthening the average maturity of its debt and optimizing its capital structure and financial cost. That issue, for 500 million euros, established an annual coupon of 1%, maturing on February 16, 2025. In February 2020, it continued with a second placement, which is now partially repurchased, and in July of that year, Already in the middle of the pandemic, it closed a third, also for 500 million. In the latter case, the coupon rose to 2.25%, maturing on February 13, 2026.
Cepsa closed the first half of 2022 with net liabilities of 2,758 million euros, thus lowering the 2,918 million it registered a year earlier. This reduction and, above all, the strong growth in gross operating profit (ebitda), which went from 842 million to 1,742 million, allowed the energy company to boost its deleveraging. Thus, the net debt to EBITDA ratio stood at 1.1 times last June, compared to 1.5 times a year ago. The firm controlled by Mubadala and Carlyle has divestments under way, such as that of its cogeneration business -which it finalizes with Ignis-, which will help to continue with the debt reduction.
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