Gas Networks Ireland to redeem €500m of bonds early

Ervia's Gas Networks Ireland unit has decided to exercise an option to redeem €500 million of bonds ahead of their scheduled repayment date in April.

The company, which is a sister company to Irish Water, is entitled to buy back the bonds in December 2016 and is prepared to pay holders of the bonds a 4.2 per cent premium for every €1 they are owed. The bonds carry an annual coupon, or interest rate, of 3.625 per cent.

The move comes only weeks after Gas Networks sold €625 million of bonds to help raise funds for the repayment.

The transaction, which saw the company sell 10-year bonds to carry a coupon of 1.375 per cent and 20-year bonds at a 2.25 per cent rate, marked the first debt sale under its new corporate structure since its parent sold off its Bord Gáis Energy unit in 2014 for €1.1 billion. UK power group Centrica led a consortium of bidders that acquired the division.