Portugal's EdP raises €450m in securitisation deal Electricidade de Portugal, the power utility, has securitised €450m of regulatory receivables in the country's largest public securitisation since before the financial crisis. The transaction on Friday was seen as further evidence of Portugal's successful return to the international debt market after Lisbon raised €3bn earlier this month in its first issue of new government bonds since requesting an international bailout two years ago. "This clearly shows that capital markets are now open for Portugal," said Paulo Gray, managing director and principal of StormHarbour Securities, the London-based boutique, which was the sole arranger and bookrunner for the deal. The size of the transaction, which opens a new international asset class for Portuguese securitisations, was increased from €300m to €450m. The issuer for EDP was Tagus STC, a Portuguese securitisation vehicle. StormHarbour said the deal was distributed to a total of 29 overseas investors dominated by UK and southern European insurance companies and asset managers. "There is appetite for Portuguese risk as long as transactions are adequately structured and take into account relevant investor concerns," Mr Gray said. Bankers said the deal would help EDP, one of Portugal's biggest listed companies, optimise its balance sheet and gain access to a new investor base. The securitisation has an average weighted maturity of two years and was priced at a yield of 132 basis points over Portugal's 2-year government bonds, towards the lower end of the initial guidance range of 125-150 bps over 2-year bonds. It is the first time EDP has securitised regulatory receivables in the international market. The receivables arise from the country's so-called tariff deficit, the amount the state owes energy producers to make up the difference between their real cost of supplying energy and the prices consumers pay. The securitisation applies to renewable energy receivables totalling about €900m that were due to EDP in 2012 and which the government has guaranteed to pay back over the next five years. EDP had securitised regulatory receivables in the domestic market in 2008 and had directly sold close to €300m in private domestic placements earlier this year. The company is also owed about €1bn in regulatory receivables not relating to renewable energy. The global securitisation market imploded during the financial crisis, with the value of deals dropping from a peak of $2.1tn in 2007 to just $475bn in 2008, according to Dealogic. Volumes have begun to recover slowly in recent years, but Europe has lagged behind. In the eurozone periphery - Greece, Italy, Spain, Portugal and Ireland - there were only six deals worth $2.4bn last year. Before the EDP securitisation there had only been three deals worth $1.4bn this year. Additional reporting by Robin Wigglesworth in London