CEZ announced the conditions of bonds emission that will be introduce on the Czech market. The volume of the bond issue is CZK 7bn with coupon rate of 4.3%. The bonds maturity date is in 2010. The proceed will be used for CEZ general financial need, company development, and refinancing within CEZ group, said CFO Petr Voboril.
We see the bond issue as positive because it improves CEZ capital structure and effectively lower WACC by approximately 4bp and add CZK10 to our fair value. We already factored in the bond issue in our valuation when it was announce by CEZ at the end of May, therefore we see the news as neutral for today’s trading. Also, we believe it has been already factored in by the market.