15 February 2016

Viveracqua Hydrobond 1: new minibond issuance for €77 mln by the corporates belonging to the water utilities consortium in the Veneto region

One year and a half after the subscription of minibonds issued by 8 out of 14 members of the Viveracqua Consortium, the SPV Viveracqua Hydrobond 1 underwrites additional 5 minibonds for a total amount of €77 million issued by as many participating companies to the same Consortium (Polesine Acque S.p.A. for €12 million, Alto Trevigiano Servizi S.r.l. for €30 million, Acque Veronesi S.c.a.r.l. for €20 million, Azienda Gardesana Servizi S.p.A. for €8 million and BIM Gestione Servizi Pubblici for €7 million). Viveracqua Consortium was founded by local water utilities in the Veneto region.

The long-term funding will be used by the new issuers to finance infrastructure investments in the integrated water sector (water supply, water treatment and sewerage) in various municipalities of the Veneto region.

In 2014 Viveracqua Hydrobond 1 subscribed 8 minibonds for a total amount of €150 million via the issuance of ABS (Series I) for the equivalent amount. The ABS were bought by institutional investors, primarily the European Investment Bank (EIB), pension fund and other banks.

The new ABS (Series II) equal to €77 million, issued by Viveracqua Hydrobond 1 to finance the subscription of the new minibonds, is pari-passu with the Series I. The institutional investors that subscribed the Series II are the EIB and Banca Finint.

The Series II interest rate is 3.6% per annum, 30 basis points lower than the coupon of Series I. However, the legal maturity date remains the same (July 2034).

The Series I and Series II are both unrated and listed on the Luxembourg Stock Exchange.

Among the primary actors of the project there is also Veneto Sviluppo, the financing arm of the Veneto region, which granted a cash guarantee to cover first losses on minibonds. In addition, the issuers of minibonds provided the SPV with a cash reserve, for a total guarantee (along with the one provided by Veneto Sviluppo) of 20% of the ABS issued.

Securitisation Services acts as:

• Primary Servicer
• Corporate Servicer
• Representative of Noteholders
• Calculation Agent