What were the key objectives behind the deal and how does it support TenneT Germany’s next phase of investment?
Last year, TenneT Germany went through a dual-track process where we prepared an IPO but also a full M&A deal on the equity side. From a liquidity perspective, the aim was to sign the €12bn RCF well ahead of time before new equity investors came on board. Designing the RCF meant creating the first standalone credit facility for TenneT Germany. Before that, we were financed by intercompany loans from TenneT Holding.
TenneT Germany has an overall investment programme of €65bn for the period 2025 to 2029. The RCF itself is a pure liquidity backup. We do not plan to draw or utilise the facility. The liquidity backstop will help us to achieve our credit ratings, which we need to enter the debt capital markets and to finance the €65bn investment programme.
In structuring a facility of this scale, what were the main considerations in designing the transaction and selecting the core arranging banks?
From a relationship perspective, it was important that we secured the support of our parent company’s core banking group. However, as TenneT Germany is operating in Germany, we also wanted to bring more German banks on board. At the same time, it was important to internationalise the banking group, with a particular focus on the US because that market could become a very relevant market for us in the future. We also wanted to have Asian banks on board, and now have two Japanese banks in the consortium.
It quickly became clear that banks were very supportive of our business model. We are a green, fully taxonomy-aligned player and banks wanted to support that story. Our financials are also very strong and the business model is fully regulated. Germany has a very stable and predictable regulatory framework in place, which provides visibility on our revenues. Our regulated asset base stood at approximately €37bn in 2025. This underlines both our position as Germany’s largest transmission system operator and the scale of the €65bn investment programme we are currently delivering.
As a result, we received enormous ticket sizes combined with so-called “love letters”, where banks — subject to credit approval — confirmed in writing that they were able to commit large volumes to the facility. For example, we received one commitment letter of €1.6bn and others of around €1.25bn. Early commitment was one of the main criteria in selecting our core banking group. Pricing and relationship considerations were also important. In the end, the four coordinators and underwriters were BNP Paribas, Deutsche Bank, ING and UniCredit. .
Why was securing a fully underwritten facility important, rather than pursuing a best-efforts structure?
We started the process when I joined in July 2025 and wanted to have the facility in place by mid to late September. That meant we had just a little over two months for preparation, including signing. For a company that had never raised its own debt before, that is a very short period of time, especially given the size of the transaction. Because of this timing constraint, we opted for a fully underwritten deal.
The second reason was to ensure that the facility was in place ahead of any potential IPO or a potential M&A transaction. The aim was to send a signal to the market and to potential private investors on the equity side that TenneT Germany has standalone creditworthiness and is able to secure funding independently.
With the RCF in place, what are your plans for approaching the bond market?
The RCF was the first major milestone we achieved. In parallel with the syndication of the RCF in October, we also prepared our Green Finance Framework and our EU Green Bond Factsheet, which sits alongside the framework and represents a state-of-the-art approach to issuing green bonds. We received a second-party opinion from Sustainable Fitch, which rated the framework “Excellent”. That provides third-party confirmation of its quality and supports our position as a dark-green issuer. At the same time, we established our €35bn EMTN programme. This programme is particularly notable because it allows us to issue both senior bonds and hybrid bonds under a single programme.
This creates a strategic advantage. It allows us to issue hybrid bonds within days rather than weeks. Other issuers often need to go through a tax ruling before issuing hybrids, which can take four to six weeks. In our case, the terms have already been pre-checked by the tax authority. Given that almost 100% of our investments are EU taxonomy-aligned, we can issue both senior and hybrid bonds in green format, which broadens our investor universe.
Following publication of the EMTN programme, we are now focusing on establishing our credit ratings. We are currently working with the rating agencies and expect the ratings to be published in April 2026 at the earliest. From April onwards we will begin investor education around the rating and the TenneT Germany credit story. We are aiming for an inaugural transaction later this year, once we have completed the equity process and closed the financial year.