Snam SpA Finalises Conversion Terms for EUR 500 Million Green Bond

Snam SpA, the Italian utility that operates the country’s natural‑gas distribution network, has set the conversion parameters for a EUR 500 million green bond that matures in 2031. The bond, which is EU‑taxonomy aligned, can be converted into existing ordinary shares of Italgas, the company Snam controls through a 33.1 % stake. The conversion price has been fixed at EUR 10 452,1 per share, calculated as the arithmetic average of Italgas’ weighted‑average share price between 7 January 2026 and 9 January 2026. The accompanying 25 % conversion premium translates into an implicit conversion price of EUR 13 065,1 per bond.

Exchange Mechanics and Share Allocation

Upon receipt of an exchange notice from an obligor, Snam may either deliver the requisite shares or, if it prefers, offer a cash alternative. The initial exchange property will comprise roughly 38.3 million shares, representing about 3.8 % of Italgas’ equity and 33.1 % of Snam’s current ownership. Under the parasocial agreements with CDP, Snam must maintain a minimum stake of 6.75 % in Italgas, a threshold that will be respected through the exchange.

Refinancing Activity and Market Position

Earlier on 8 January, Snam successfully closed a refinancing of its 2028 “EU‑Taxonomy‑aligned Transition Bonds”, acquiring the nominal amount for EUR 494.3 million—98.9 % of the outstanding 2028 issue. The purchase price was EUR 187 703,48 per bond, plus accrued interest up to 14 January 2026, totaling EUR 188 664,12. The transaction was structured by BNP Paribas, Goldman Sachs and J.P. Morgan as structuring banks, with BofA, Intesa Sanpaolo and UniCredit acting as joint global coordinators and bookrunners.

These moves reinforce Snam’s disciplined capital strategy, ensuring liquidity for future infrastructure upgrades while maintaining a favorable debt profile. With a market cap of roughly EUR 19.9 billion and a price‑to‑earnings ratio of 14.29, the company remains well‑capitalised and positioned to support Italy’s transition to low‑carbon energy.

Demand Outlook and Strategic Implications

Preliminary data released by Snam on 8 January indicate that Italy’s gas demand reached 63.4 billion cubic metres last year, up 2 % (1.2 billion cubic metres) from 62.2 billion cubic metres in 2024. The growth is largely attributed to an 1.8 % increase in withdrawals by the thermoelectric sector, underscoring the continued importance of gas as a bridge fuel. In this environment, Snam’s conversion strategy provides an avenue to unlock value from its Italgas holdings without diluting its ownership base beyond the mandated minimum.

Forward‑Looking Perspective

By setting the conversion price at a level that reflects current market conditions, Snam ensures that bondholders receive a fair value while safeguarding its strategic control over Italgas. The successful refinancing of the 2028 bonds further exemplifies Snam’s ability to secure favourable funding terms, a critical factor as the company expands its network to accommodate increasing gas flows and forthcoming hydrogen projects.

Overall, Snam’s recent actions signal a deliberate effort to balance financial flexibility with long‑term infrastructure investment, positioning it to capitalize on Italy’s evolving energy landscape while maintaining shareholder confidence.