edp announcement

EDP to receive EUR 750 million in securitization of electricity tariff deficit in Portugal

Wednesday, 26 March 2014

EDP Serviço Universal, S.A., the last resort supplier for the Portuguese electricity system, a company wholly owned by the EDP Group, has entered into an agreement for the assignment, by means of a true sale without recourse to Tagus – Sociedade de Titularização de Créditos, S.A., of a portion of the 2013 Tariff Deficit, and respective interest, for an amount of EUR 750 million.

Under the terms and for the purposes of article 248 of the Securities Code, EDP – Energias de Portugal, S.A. ("EDP") hereby discloses the following information to the market and to the public in general:

EDP Serviço Universal, S.A. ("EDP SU"), the last resort supplier for the Portuguese electricity system, a company wholly owned by the EDP Group, has entered into an agreement for the assignment, by means of a true sale without recourse to Tagus – Sociedade de Titularização de Créditos, S.A. ("Tagus"), of a portion of the 2013 Tariff Deficit, and respective interest, for an amount of EUR 750 million.

The 2013 Tariff Deficit resulted from the deferral, for the period of 5 years, of the recovery of the 2013 over costs (including the adjustments for 2011 and 2012) related to the acquisition of electricity from special regime generators. The outstanding amount due to EDP SU before this agreement was approximately EUR 1.1 billion.

Tagus will finance this transaction through the issuance of EUR 750 million of senior notes with a yield of 3%, coupon of 2.98%, and an expected rating of Baa3/BBB/BBB High, attributed by Moody's, Fitch and DBRS, being the issuance of such debt instruments subject to CMVM's approval and expected to be admitted to trading on NYSE Euronext Lisbon.

The transaction has been solely arranged by StormHarbour Securities LLP and joint lead managed by Banco Santander Totta S.A., J.P. Morgan and StormHarbour Securities LLP.

This transaction is in addition to the EUR 138 million sold by EDP SU in February.

EDP – Energias de Portugal, S.A.