RWE has a sound financial base and a stable capital structure. The merging of the renewables, grids and sales businesses into a new subsidiary in 2016 not only resulted in major changes for RWE’s operations – it also necessitated revisions in terms of financing and the classic rating indicators for RWE.
The reason behind this was that our net debt primarily comprises non-current provisions for pensions, the decommissioning of nuclear power stations and the reclamation of mines. We compare this with the value of our financial investment innogy. Since the market value of our investment more than covers the present value of our long-term commitments, traditional debt ratios quickly reach their limits.
Leading ratings agencies certify creditworthiness under the “investment grade” category
The leading ratings agencies of Moody’s and Fitch consistently certify our creditworthiness under the “investment grade” category, not least due to our conservative financial policy. In light of the increased financial flexibility as a result of the IPO of innogy, for example, and the refund of the nuclear fuel tax, we were able to further optimise our capital structure. Our hybrid capital currently stands at around €1.1 billion (as of April 2019). At the end of 2016 it was still around €3.9 billion.
In April, July and October 2017, we repaid three hybrid bonds at the earliest possible time with a nominal converted total value of about €1.3 billion. In addition to these repayments, we used part of the nuclear fuel tax to buy back further hybrid bonds with a nominal converted total value of around €0.6 billion. End of March 2019 we exercised our right to redeem the GBP 750 million hybrid bond on its first call date.
Syndicated credit line prematurely renewed and increased to €5 billion
Our short-term financing is permanently secured. We cover our short-term liquidity requirements with the commercial paper programme, which enables us to raise funds with an equivalent value of up to USD 5 billion. Furthermore, we also have a syndicated credit line of €5 billion, which secures the Group’s liquidity. The syndicated credit line replaces the existing €3 billion agreement and consists of two tranches, with terms of two and five years. They can be prolonged for one and two years, respectively. The credit line is being provided by 27 international banks. Our subsidiary innogy has also established its own credit line.