Wemag is looking for €25m in a 10 year transaction, according to market sources, with the notes set to be priced at 95bp over mid-swaps. The company is 74.9% owned by municipalities in the northeast of Germany, in the state of Brandenberg and Mecklenburg, and 25.1% by Thüga AG.
Wemag follows two Austrian utilities into the market, which have helped keep the institutional investors that typically buy utility debt at 10 years or longer busy. Smaller savings and co-operative banks buy utilities too, but typically only out to seven years.
Austrian electricity and gas company Energie Burgenland is also in the market with a Schuldschein deal, via Raiffeisen Bank International. The deal has seven and 10 year tenors, with an initial target of €50m.
This followed Energie AG Oberösterreich, an energy company majority owned by the state of Upper Austria, which entered the Schuldschein market in April looking for debt at 20, 25 and 30 years.
“While it’s encouraging that utilities are still tapping the market, it’s unsurprising,” said a Schuldschein arranger, who has brought several utilities to market. “There is always a steady stream of utilities, linking with investors looking to match assets and liabilities. That has not changed because of the pandemic.”