Elering AS EUR 225 million 7 year Debut Eurobond Issue

Elering AS, the electricity transmission system operator in the Republic of Estonia, rated A3 by Moody’s, launched a very successful debut Eurobond issue on 1 July 2011.

The bond matures on 12 July 2018, pays annually a coupon of 4,625% (actual/actual) and priced at a re-offer yield of 4,829% and a re-offer price of 98.812. ISIN: XS0645947457

The proceeds will be used for refinancing the existing syndicated loan, for financing investments and for general corporate purposes.

Joint lead managers and Joint Bookrunners for the transaction were Deutsche Bank and Nordea. Swedbank acted as Joint Lead Manager.
The bond will be listed on the London Stock Exchange.

Taavi Veskimägi, the CEO said that the success of the Eurobond issue allows Elering to aquire capital with best terms to complete our extensive investment program in the following 4 years. ”For upcoming years the most important investments will be the purchase of EstLink 1 from its current owners and the construction of EstLink 2 and an emergency reserve power station. We believe this is the most efficient way to attract debt capital and so will benefit the whole society.”

Execution highlights

• The mandate was announced on 31 May 2011
• 5-day roadshow was conducted, visiting Helsinki, Copenhagen, London, Munich, Geneva, Zurich and Tallinn
• The book-building took place on 1 July 2011 with the price guidance around +175bp and minimum amount of EUR 200 million
• The orderbook attracted strong demand from the European investors, resulting in the total orders of EUR 327 million from 52 investors in 14 countries
• Due to the oversubscription of 1,45 times the spread was tightened to +173bp and the amount was increased to EUR 225 million

Distribution summary
The final distribution shows a very well diversified investor base both in terms of geographic area and the type of investors:

Background of Elering

• Established in 2004
• Fully owned by the Republic of Estonia
• Owns and operates the transmission system of the Republic of Estonia which consists of 5 252 km of transmission lines and 150 substations
• Secures the functioning of the Estonian energy system by maintaining the short term energy balance
• To achieve security of supply, Elering maintains and develops the national transmission grid and international connections.
• Elering controls the Estonian electricity system in real time, ensuring the operation of the transmission network, and the balance between production and consumption.
• Develops and facilitates the functioning of the energy markets

Contact:
Peep Soone
CFO
Phone: +372 71 51 202
E-mail: peep.soone@elering.ee

Disclaimer
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States of America or to conduct a public offering of securities in the United States of America. Copies of this announcement are not being made available and may not be distributed or sent into the United States.

This communication does not constitute an offer of securities to the public in the United Kingdom. Consequently, this communication is directed only at (i) persons who are outside the United Kingdom, (ii) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), (iii) high net worth entities falling within Article 49(2) of the Order and (iv) other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

THIS ANNOUNCEMENT COMPRISES AN ADVERTISEMENT FOR THE PURPOSES OF DIRECTIVE 2003/71/EC (THE “PROSPECTUS DIRECTIVE”) AND HAS BEEN PREPARED SOLELY IN CONNECTION WITH THE OFFERING. A FINAL PROSPECTUS WILL BE MADE AVAILABLE TO THE PUBLIC IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE IN DUE COURSE. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS.