At a very high interest rate, above all interest rates on loans it has received to date, GEK TERNA borrowed. While it may be presented as a success that it gathered 2.3 billion euros in bids, when the interest rate settles at 4.84%, it is not so successful. That is roughly the yield of the French ten-year bond today. Furthermore, it is recalled that the bond maturing in July 2027 carries an interest rate of 2.75% and stands at 500 million euros. The 300-million-euro bond maturing in December 2028 carries an interest rate of 2.3%, and the bond maturing in September 2032 standing at 500 million euros carries an interest rate of 3.2%. Even now, yield to maturity is 4.48%, namely below the interest rate the company received today.
What BN reported earlier
Following high volatility in the stock during Friday's session, it appears GEK TERNA decided to enter the markets, although Santander was saying it could wait and that the ability to postpone constituted a sign of strength. Now it comes out seeking 500 million euros with pricing at 165–170 basis points above the midswap reference rate. Initial estimates by market executives place the interest rate around 5%–5.10%, with bids submitted so far standing slightly above 1.5 billion euros. The bond carries a Baa3 rating from Moody's and BBB- from S&P, and will be listed for trading on the Luxembourg Stock Exchange. Settlement will take place on November 2, with maturity set for 2033. It will be governed by English law. Global Coordinators are BNP PARIBAS, J.P. Morgan (B&D), Mediobanca, with the order book also being run by AXIA, Citigroup, Deutsche Bank, Eurobank, Goldman Sachs Bank Europe SE, HSBC, Morgan Stanley, National Bank of Greece, Piraeus Bank, and Optima Bank. The stock stands at 38.88 euros with a gain of +0.99%, on volume of 197 thousand shares and capitalization at 4.62 billion euros.
What Santander was saying
Jitteriness in the bond market and solid Q3 performance from operational motorways under GEK TERNA make the infrastructure Group's stock an investment opportunity, Santander noted in an informational memo last Friday. As the firm explained, GEK TERNA's decision not to proceed with issuing a Eurobond—a move for which it holds a twelve-month window—should be interpreted as a sign of strength and an action to protect its shareholders. This is because the Group possesses abundant liquidity at the parent level and therefore has no pressing need to issue a bond. Consequently, as Santander commented, the market reaction to the stock on Friday lacked foundation and constituted a buying opportunity, following the robust performance delivered by motorways belonging to GEK TERNA's concessions portfolio. Given these facts, the firm issued a target price of 62 euros, maintaining an outperform recommendation.
Are GEK TERNA's loans secured by shares?
We ask. Certain sources contend that among collateral pledged by GEK TERNA are guarantees secured by shares of the group, whose stock has plummeted. Accounting-wise, GEK TERNA has lost 1.2 billion euros from its market value. Rumors indicate that pledged shares sit in the 30-to-32-euro zone, and if true, the stock reached 36 euros intraday. Obviously, some feel anxiety: banks that financed GEK TERNA and now see shadows. If share collateral exists, GEK TERNA must confirm or deny it; if it fails to do so, a veil of mystery will overshadow the stock.
How GEK TERNA lost 1.2 billion in market value
GEK TERNA went through a long period of introversion when the group, along with TERNA Energy prior to its sale, fought battles to stay at 11 to 12 euros, while main shareholder Georgios Peristeris fought personal loans connected to share-backed loans. Since then, many developments occurred: TERNA Energy was sold, severely easing pressure on Peristeris's personal loans and de-escalating pressure on the GEK TERNA group, which had been bogged down. GEK TERNA ended up winning bids on all major motorway concessions—paradoxically—reaching near the present day; despite showing thin profitability relative to project scope, despite being an overleveraged group with 9.3 billion in loans, bonds, and letters of guarantee, and with assistance from Spanish banking giant Santander, it reached 48 euros or a 5.7-billion-euro market capitalization. Georgios Peristeris, as main shareholder with roughly 30%, saw his wealth in GEK TERNA valued at 48 euros reaching approximately 1.7 billion euros.
Why did GEK TERNA lose 1.2 billion in market value?
GEK TERNA contends it is a healthy company, concealing, however, that certain loans are tied to project progress, essentially transferring risk to banks. Why did it lose 1.2 billion in market value so easily, and why was it humiliated as a company over the postponement of the 500 million euro bond issuance that it allegedly did not need? Recently, GEK TERNA stock fell to 36 euros, a valuation of 4.3 billion euros. The current market value of GEK TERNA is 38.5 euros or a 4.5-billion-euro total market cap, meaning from highs of 48 euros, the loss in market capitalization is 1.2 billion euros or 22% of its market value. It should be noted, however, that this loss is accounting-based and subject to change depending on stock market conditions.
The answers are obvious
Investors are worried: GEK TERNA is leveraged 10 to 12 times EBITDA (earnings before interest, taxes, depreciation, and amortization) and is valued today at 28 times earnings, a valuation non-existent anywhere else. It is a laughable excuse for GEK TERNA to pretend that postponing the bond issuance means nothing because the 500 million euros was a speculative move and not an immediate need. GEK TERNA is lying, assuming investors will fail to understand. With 9.3 billion in loans, bonds, and letters of guarantee, GEK TERNA has failed to convince; its business narrative is riddled with holes, entails significant risks, and raises numerous questions. We note that the SSM, the Single Supervisory Mechanism of European banks, initiated an audit across the 4 major systemic banks, inspecting the 25 largest corporate borrowers, and information reported exclusively by BN (bankingnews) was 100% cross-checked and 100% confirmed; GEK TERNA management knows this well.
Santander's anxiety and Peristeris's secret
Following GEK TERNA's shocking fiasco, Spanish bank Santander—which set a bubble target price of 62 euros for the stock, translating 118.93 million shares times 62 euros into a 7.4-billion-euro total market cap with a P/E ratio of 46 based on 2026 earnings—is making a fool of itself as a banking institution in its attempt to prop up GEK TERNA. All these parties think investors can simply be deceived by junk research reports. But behind all this, what is the big secret of Georgios Peristeris, who heads GEK TERNA, that he would obviously prefer not to see revealed?
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