Obligation Enera 8.75% ( US29265WAA62 ) en USD

Enera

100 % ▼

Italie

US29265WAA62 ( en USD )

8.75% par an ( paiement semestriel )

23/09/2073

Prospectus brochure de l'obligation Enel US29265WAA62 en USD 8.75%, échéance 23/09/2073

200 000 USD

1 250 000 000 USD

29265WAA6

BBB- ( Qualité moyenne inférieure )

Ba1 ( Spéculatif )

24/03/2026 ( Dans 137 jours )

ENEL est une multinationale italienne d'énergie publique, active dans la production, la distribution et la vente d'électricité et de gaz, opérant dans plus de 30 pays.

L'obligation US29265WAA62 (CUSIP: 29265WAA6) émise par Enel (Italie), d'une valeur nominale de 1 250 000 000 USD, avec un prix actuel de marché de 100%, offre un taux d'intérêt de 8,75%, une maturité fixée au 23/09/2073, une fréquence de paiement semestrielle, un montant minimum d'achat de 200 000 USD, et est notée BBB- par Standard & Poor's et Ba1 par Moody's.

ENEL Società per Azioni
(incorporated with limited liability in Italy)
750,019,000 5.5 Year Non-Call Capital Securities due 2078
750,000,000 8.5 Year Non-Call Capital Securities due 2081
ENEL Società per Azioni (the "Issuer" or "ENEL") will issue 750,019,000 5.5 Year Non-Call Capital Securities due 2078 (the "NC2023 Securities") and 750,000,000 8.5 Year Non-Call Capital Securities
due 2081 (the "NC2026 Securities", and, together with the NC2023 Securities, the "Securities") on 24 May 2018 (the "Issue Date"). The NC2023 Securities will comprise 500,000,000 in aggregate principal
amount of standalone new NC2023 Securities to be issued for subscription for cash (the "Standalone New Securities") and 250,019,000 in aggregate principal amount of NC2023 Securities to be issued in
exchange for existing securities pursuant to the Exchange Offer referred to under "Business Recent Significant Transactions and Developments Exchange Offer" below (the "Exchange New Securities"). The
Standalone New Securities and the Exchange New Securities constitute the same class and form a single series of NC2023 Securities.
The NC2023 Securities will bear interest on their principal amount (a) from (and including) the Issue Date to (but excluding) the First Reset Date, at the rate of 2.500 per cent. per annum and (b) from (and
including) the First Reset Date to (but excluding) the Maturity Date, at, in respect of each Reset Period, the relevant EUR 5 year Swap Rate plus (A) in respect of the Reset Period commencing on the First Reset
Date to but excluding 24 November 2028, 2.096 per cent. per annum, (B) in respect of the Reset Periods commencing on 24 November 2028, 24 November 2033 and 24 November 2038, 2.346 per cent. per annum,
and (C) in respect of any other Reset Period after 24 November 2038, 3.096 per cent. per annum (each, as defined in "Terms and Conditions of the NC2023 Securities"). Interest on the Securities will be payable
annually in arrear on 24 November in each year (each an Interest Payment Date (as defined in "Terms and Conditions of the NC2023 Securities"), except that the first payment of interest, to be made on 24
November 2018, will be in respect of the period from and including 24 May 2018 to but excluding 24 November 2018.
The NC2026 Securities will bear interest on their principal amount (a) from (and including) the Issue Date to (but excluding) the First Reset Date, at the rate of 3.375 per cent. per annum and (b) from (and
including) the First Reset Date to (but excluding) the Maturity Date, at, in respect of each Reset Period, the relevant EUR 5 year Swap Rate plus (A) in respect of the Reset Period commencing on the First Reset
Date to but excluding 24 November 2031, 2.580 per cent. per annum, (B) in respect of the Reset Periods commencing on 24 November 2031, 24 November 2036 and 24 November 2041, 2.830 per cent. per annum,
and (C) in respect of any other Reset Period after 24 November 2041, 3.580 per cent. per annum (each, as defined in "Terms and Conditions of the NC2026 Securities"). Interest on the Securities will be payable
annually in arrear on 24 November in each year (each an Interest Payment Date (as defined in "Terms and Conditions of the NC2026 Securities"), except that the first payment of interest, to be made on 24
November 2018, will be in respect of the period from and including 24 May 2018 to but excluding 24 November 2018.
References in this Offering Circular to the "relevant Securities" are to the NC2023 Securities or the NC2026 Securities, respectively, references to the "relevant Terms and Conditions of the Securities" are to
the Terms and Conditions of the NC2023 Securities or the Terms and Conditions of the NC2026 Securities, respectively and references to the "relevant Securityholders" are to the holders of the relevant Securities.
Payment of interest on the Securities may be deferred at the option of the Issuer in certain circumstances, as set out under "Terms and Conditions of the NC2023 Securities" in respect of the NC2023
Securities and "Terms and Conditions of the NC2026 Securities" in respect of the NC2026 Securities.
The Securities will be issued in bearer form, with interest coupons appertaining to the Securities (the "Coupons") and one talon for further interest coupons (the "Talon") attached on issue, each pursuant to a trust
deed each dated 24 May 2018 between the Issuer and BNY Mellon Corporate Trustee Services Limited, as trustee (the "Trustee") (the "Trust Deeds" and each, a "Trust Deed"). The Securities will be issued in
denominations of 100,000 and integral multiples of 1,000 in excess thereof.
Unless previously redeemed by the Issuer as provided below, the Issuer will redeem the NC2023 Securities on 24 November 2078 and the NC2026 Securities on 24 November 2081 at their principal amount,
together with interest accrued to, but excluding, such date and any Arrears of Interest (as defined in the relevant Terms and Conditions of the Securities). The Issuer may redeem all, but not some only, of the
relevant Securities on any Call Date at their principal amount together with any interest accrued up to, but excluding, the applicable Call Date and any Arrears of Interest. The Issuer may also redeem all, but not
some only, of the Securities at the applicable Early Redemption Price at any time upon the occurrence of a Withholding Tax Event, an Accounting Event, a Rating Methodology Event or a Tax Deductibility Event
(each as defined in the relevant Terms and Conditions of the Securities). In the event that at least 80 per cent. of the aggregate principal amount of the Securities issued on the Issue Date has been purchased by or
on behalf of the Issuer or a Subsidiary (as defined in the relevant Terms and Conditions of the Securities) and cancelled, the Issuer may redeem all, but not some only, of the outstanding Securities at the applicable
Early Redemption Price. See "Terms and Conditions of the NC2023 Securities Redemption and Purchase Purchases and Substantial Repurchase Event" in respect of the NC2023 Securities and "Terms and
Conditions of the NC2026 Securities Redemption and Purchase Purchases and Substantial Repurchase Event" in respect of the NC2026 Securities.
If at any time after the Issue Date the Issuer determines that a Withholding Tax Event, Tax Deductibility Event, Rating Methodology Event or an Accounting Event has occurred and is continuing, and has provided
the Trustee with the relevant certificate and opinion, or in the case of Condition 6.5 only, the Rating Agency Confirmation pursuant to Conditions 6.3, 6.4, 6.5 or 6.6 (as applicable), then the Issuer may, without
any requirement for the consent or approval of the Securityholders or Couponholders and subject to the pre-conditions set out in Condition 7.2, (i) exchange the Securities or (ii) vary the terms of the Securities,
so that after such exchange or variation the Securities remain or become, as the case may be, eligible for the same or (from the perspective of the Issuer) more favourable tax, accounting or ratings treatment than
the treatment to which they were entitled prior to the relevant event occurring. See "Terms and Conditions of the NC2023 Securities Exchange or Variation upon a Withholding Tax Event, Tax Deductibility
Event, Rating Methodology Event or Accounting Event and Preconditions to such Exchange or Variation" in respect of the NC2023 Securities and "Terms and Conditions of the NC2026 Securities Exchange or
Variation upon a Withholding Tax Event, Tax Deductibility Event, Rating Methodology Event or Accounting Event and Preconditions to such Exchange or Variation" in respect of the NC2026 Securities.
The Securities and the Coupons constitute direct, unsecured and subordinated obligations of the Issuer and rank and will at all times rank pari passu without any preference among themselves and with Parity
Securities and senior only to the Issuer's payment obligations in respect of any Junior Securities (each as defined in the relevant Terms and Conditions of the Securities). The Securities constitute obbligazioni
pursuant to Article 2410 et seq. of the Italian Civil Code. The Securities will not be guaranteed.
An investment in the Securities involves certain risks. For a discussion of risks, see "Risk Factors" beginning on page 1.
This Offering Circular has been approved by the Central Bank of Ireland (the "Central Bank"), as competent authority under Directive 2003/71/EC, as amended (the "Prospectus Directive"). The Central Bank
only approves this Offering Circular as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to Securities which are to be admitted to trading
on the regulated market of Euronext Dublin or other regulated markets for the purposes of Directive 2014/65/EC ("MiFID II") or which are to be offered to the public in any member state of the European
Economic Area. Application has been made to Euronext Dublin for the Securities to be admitted to the Official List and trading on its regulated market.
This Offering Circular is available for viewing on the website of the Central Bank (www.centralbank.ie).
Subject to and as set out in "Terms and Conditions of the NC2023 Securities Taxation", in respect of the NC2023 Securities and "Terms and Conditions of the NC2026 Securities Taxation", in respect of the
NC2026 Securities, the Issuer shall not be liable to pay any Additional Amounts to holders of the Securities in relation to any withholding or deduction required pursuant to Italian Legislative Decree No. 239 of
1 April, 1996 (as the same may be amended or supplemented from time to time, "Decree No. 239") where the Securities are held by a Securityholder resident for tax purposes in a country that does not al ow for
a satisfactory exchange of information with Italy and otherwise in the circumstances described in "Terms and Conditions of the NC2023 Securities Taxation", in respect of the NC2023 Securities and "Terms
and Conditions of the NC2026 Securities Taxation", in respect of the NC2026 Securities.
The Securities are expected to be rated "Ba1" by Moody's Investors Service Ltd. ("Moody's"), "BBB-" by S&P Global Ratings ("S&P") and "BBB-" by Fitch Ratings Ltd. ("Fitch"). Each of Moody's, S&P and
Fitch is established in the European Union and is registered under Regulation (EC) No. 1060/2009 (as amended) (the "CRA Regulation"). As such, each of Moody's, S&P and Fitch is included in the list of credit
rating agencies published by the European Securities and Markets Authority ("ESMA") on its website (www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the CRA Regulation. A
rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating agency.
A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency.
Each of the NC2023 Securities and the NC2026 Securities will initially be represented by a temporary global security (the "Temporary Global Security"), without interest coupons, which will be deposited on
or about the Issue Date with a common depositary for Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, S.A. ("Clearstream"). Interests in such Temporary Global Security will be exchangeable
for interests in a permanent global security (the "Permanent Global Security" and, together with the Temporary Global Security, the "Global Securities"), without interest coupons, after 40 days after the
commencement of this offering, upon certification as to non-U.S. beneficial ownership. Interests in the Permanent Global Security will be exchangeable for definitive Securit ies only in certain limited circumstances.
See "Overview of the Terms of the Securities".
Banca IMI S.p.A., BNP Paribas, CaixaBank S.A., Citigroup Global Markets Limited, Commerzbank Aktiengesellschaft, Crédit Agricole Corporate and Investment Bank, Deutsche Bank AG, London Branch,
Goldman Sachs International, ING Bank N.V., J.P. Morgan Securities plc, Merrill Lynch International, MUFG Securities EMEA plc, NatWest Markets Plc, Société Générale and UniCredit Bank AG (the "Joint
Lead Managers"), expect to deliver the Securities to purchasers in bearer form on or about 24 May 2018.
The Securities have not been and will not be registered under the U. S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other
jurisdiction of the United States, and are bearer securities that are subject to U.S. tax law requirements. The Securities may not be offered, sold or delivered within the United States or for the account
or benefit of U.S. Persons (as defined in Regulation S under the Securities Act). For a description of these and certain further restrictions on offers, sales and transfers of Securities and distribution of
this Offering Circular, see "Subscription and Sale".

Joint Lead Managers

Banca IMI
BNP PARIBAS
BofA Merrill Lynch
Crédit Agricole CIB
CaixaBank S.A.
Citigroup
Commerzbank
Deutsche Bank
Goldman Sachs International
ING
J.P. Morgan
MUFG
NatWest Markets
Société Générale
UniCredit Bank
Corporate & Investment Banking

The date of this Offering Circular is 22 May 2018.

NOTICE TO INVESTORS
This Offering Circular comprises a prospectus for purposes of Article 5.3 of the Prospectus Directive.
The Issuer accepts responsibility for the information contained in this Offering Circular. To the best of the
knowledge of the Issuer (having taken all reasonable care to ensure that such is the case), the information
contained in this Offering Circular is in accordance with the facts and does not omit anything likely to affect
the import of such information. Certain Information has been extracted from or is the result of the Issuer's
elaboration on information provided by third-party sources, such as company filings, National Regulators
Annual Reports and leading information providers, which the Issuer deems to be the most reliable. The Issuer
confirms that such information has been accurately reproduced and, as far as it is aware and is able to ascertain
from published information, no facts have been omitted which would render the reproduced information
inaccurate or misleading.
No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is
accepted by the Joint Lead Managers or the Trustee as to the accuracy or completeness of the information
contained in this Offering Circular or any other information provided by the Issuer in connection with the
offering of the Securities.
To the fullest extent permitted by law, none of the Joint Lead Managers, the Trustee, the Principal Paying Agent
or the Agent Bank (each as defined in the relevant Terms and Conditions of the Securities) accepts any
responsibility for the contents of this Offering Circular or for any other statements made or purported to be
made by any of the Joint Lead Managers or on its behalf or by the Trustee or on its behalf in connection with
the Issuer or issue and offering of any Securities. Each of the Joint Lead Managers, the Trustee, the Principal
Paying Agent and the Agent Bank accordingly disclaims all and any liability whether arising in tort or contract
or otherwise which it might otherwise have in respect of this Offering Circular or any such statement.
No person is or has been authorised by the Issuer to give any information or to make any representation not
contained in or not consistent with this Offering Circular or any other information supplied in connection with
the offering of the Securities and, if given or made, such information or representation must not be relied upon
as having been authorised by the Issuer, any of the Joint Lead Managers or the Trustee.
Neither this Offering Circular nor any other information supplied in connection with the offering of the
Securities (a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a
recommendation by the Issuer, any of the Joint Lead Managers or the Trustee that any recipient of this Offering
Circular or any other information supplied in connection with the offering of the Securities should purchase any
Securities. Each investor contemplating purchasing any Securities should make its own independent
investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Securities shall in any
circumstances imply that the information contained herein concerning the Issuer is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the offering of the
Securities is correct as of any time subsequent to the date indicated in the document containing the same. The
Joint Lead Managers and the Trustee expressly do not undertake to review the financial condition or affairs of
the Issuer during the life of the Securities or to advise any investor in the Securities of any information coming
to their attention.
This Offering Circular does not constitute an offer to sell or the solicitation of an offer, or an invitation, to buy
the Securities in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The distribution of this Offering Circular and the offer or sale of the Securities may be restricted
by law in certain jurisdictions. None of the Issuer, the Joint Lead Managers or the Trustee represents that this

Offering Circular may be lawfully distributed, or that the Securities may be lawfully offered, in compliance
with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption
available thereunder, or assumes any responsibility for facilitating any such distribution or offering. In
particular, no action has been taken by the Issuer, the Joint Lead Managers or the Trustee that would permit a
public offering of the Securities or the distribution of this Offering Circular in any jurisdiction where action for
that purpose is required. Accordingly, no Securities may be offered or sold, directly or indirectly, and neither
this Offering Circular nor any advertisement or other offering material may be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.
Persons into whose possession this Offering Circular or any Securities may come must inform themselves about,
and observe, any such restrictions on the distribution of this Offering Circular and the offering and sale of the
Securities. In particular, there are restrictions on the distribution of this Offering Circular and the offer or sale
of the Securities in the United States, the United Kingdom and the Republic of Italy. See "Subscription and
Sale".
MIFID II product governance / professional investors and ECPs only target market Solely for the
purposes of each manufacturer's product approval process, the target market assessment in respect of
the Securities (as defined herein) has led to the conclusion that: (i) the target market for the Securities is
eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for
distribution of the Securities to eligible counterparties and professional clients are appropriate. Any
person subsequently offering, selling or recommending the Securities (a "distributor") should take into
consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II
is responsible for undertaking its own target market assessment in respect of the Securities (by either
adopting or refining the manufacturers' target market assessment) and determining appropriate
distribution channels.
PRIIPS REGULATION / PROHIBITION OF SALES TO EEA RETAIL INVESTORS The Securities
are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or
(ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation
Directive"), where that customer would not qualify as a professional client as defined in point (10) of
Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No
1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Securities or otherwise
making them available to retail investors in the EEA has been prepared and therefore offering or selling
the Securities or otherwise making them available to any retail investor in the EEA may be unlawful
under the PRIIPs Regulation.
__________________________
IN CONNECTION WITH THE OFFERING OF THE SECURITIES, J.P. MORGAN SECURITIES PLC (OR
PERSONS ACTING ON ITS BEHALF) (TOGETHER THE "STABILISING MANAGER") MAY OVER-
ALLOT SECURITIES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE SECURITIES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE
PREVAIL. HOWEVER, STABILISATION ACTION MAY NOT NECESSARILY OCCUR. ANY
STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC
DISCLOSURE OF THE TERMS OF THE OFFER OF THE SECURITIES IS MADE AND, IF BEGUN, MAY
CEASE AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE
ISSUE DATE OF THE SECURITIES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE
SECURITIES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY
THE STABILISATION MANAGER (OR PERSON(S) ACTING ON BEHALF OF THE STABILISATION
MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
ii

TABLE OF CONTENTS

Page
RISK FACTORS ................................................................................................................................................ 1
INCORPORATION BY REFERENCE .............................................................................................................29
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ..............................................................32
OVERVIEW ......................................................................................................................................................38
USE OF PROCEEDS ........................................................................................................................................53
CAPITALISATION ...........................................................................................................................................54
SELECTED FINANCIAL DATA .....................................................................................................................55
BUSINESS ........................................................................................................................................................59
MANAGEMENT ..............................................................................................................................................98
PRINCIPAL SHAREHOLDERS ....................................................................................................................120
TRANSACTIONS WITH RELATED PARTIES ............................................................................................121
TERMS AND CONDITIONS OF THE NC2023 SECURITIES ....................................................................122
TERMS AND CONDITIONS OF THE NC2026 SECURITIES ....................................................................146
OVERVIEW OF PROVISIONS RELATING TO THE SECURITIES WHILE REPRESENTED BY THE
GLOBAL SECURITIES .........................................................................................................................170
CERTAIN TAX CONSIDERATIONS ............................................................................................................173
SUBSCRIPTION AND SALE ........................................................................................................................182
GENERAL INFORMATION ..........................................................................................................................185

iii

RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Securities.
Most of these factors are contingencies which may or may not occur and the Issuer is not in a position to express
a view on the likelihood of any such contingency occurring. In addition, factors that are material for the purpose
of assessing the market risks associated with the Securities are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Securities, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with
any Securities may occur for other reasons which may not be considered significant risks by the Issuer based
on information currently available to the Issuer and which it may not currently be able to anticipate. Prospective
investors should also read the detailed information set out elsewhere in this Offering Circular and reach their
own views, based upon their own judgment and upon advice from such financial, legal and tax advisers as they
have deemed necessary, prior to making any investment decision.
References to the "relevant Securities" are to the NC2023 Securities and the NC2026 Securities, respectively
and references to the "relevant Terms and Conditions of the Securities" and the "relevant Conditions" are
references to Conditions under "Terms of the NC2023 Securities" and "Terms of the NC2026 Securities",
respectively. Words and expressions defined in the relevant Terms and Conditions of the Securities or elsewhere
in this Offering Circular have the same meanings in this section.
Risks related to the Group
Due to the nature of its business, the Group is exposed to a variety of risks, including, inter alia, market risks,
credit risk, liquidity risk, industrial and environmental risks and regulatory risk, which are discussed herein
below.
The Group is burdened by significant indebtedness and it must generate sufficient cash flow to service
As of 31 December 2017, the Group's net financial debt was equal to 37,410 million, compared to 37,553
million as of 31 December 2016. The Group's net financial debt is calculated in accordance with paragraph 127
of Recommendation CESR/05-054b implementing Regulation 2004/809/EC and in line with the CONSOB
instructions of 26 July 2007, net of financial receivables and long-term securities.
As of 31 December 2017, the repayment schedules of the Group's long-term debt provided for the repayment
of 7,000 million in 2018 (full year) and 3,945 million in 2019. The Group's net short-term financial debt
(including current maturities of long-term debt) showed a net creditor position and amounted to 2,585 million
as of 31 December 2017, compared to 1,162 million as of 31 December 2016. Any failure by the Group to
make any of its scheduled debt repayments, or to reschedule such debt on favourable terms, would have a
material adverse effect on the Group, its business prospects, its financial condition and its results of operations.
For further information on the performance indicators, see paragraph headed "Definition of performance
indicators" on pages 24 and 25 of the 2017 Audited Consolidated Financial Statements that is incorporated by
reference hereto.
The credit agreements and bond agreements that the Group has entered into contain restrictive
covenants that limit its operations
The agreements relating to the long-term financial indebtedness of the Group contain covenants that must be
complied with by the borrowers (ENEL and the other companies of the Group) and, in certain instances, by
ENEL, as guarantor. The failure to comply with any of them could constitute a default, which could have a
material adverse effect upon the Group, its business prospects, its financial condition or its results of operations.
In addition, covenants such as "negative pledge" clauses, "material change" clauses and covenants requiring
1

the maintenance of particular financial ratios or credit ratings, constrain the Group's ability to acquire or dispose
of assets or incur new debt.
A portion of the Group's indebtedness is subject to floating interest rates, thus subjecting the Group to
the risk of adverse interest rate fluctuations
Market interest rate affects ENEL results mainly through possible increase in interest expenses due to floating
rate indexed debt. As at 31 December 2017, 27.4 per cent. of gross financial debt was floating rate, as compared
to 33.1 per cent. as of 31 December 2016. Taking into account the hedge accounting of interest rates considered
effective pursuant to the IFRS-EU, as of 31 December 2017 21.8 per cent. of the debt was exposed to interest
rate risk 28.1 per cent. as at 31 December 2016). Any significant increase in interest rates could therefore lead
to an increase in the Group's debt service expenses, which would have a material adverse effect on the Group,
its business prospects, its financial condition and its results of operations.
The Group adopted risk management policies that provide for the hedging of interest rate risk exposure in line
with limits and targets assigned by the top management of the Group. Hedging activities typically entail the use
of derivative instruments aiming at transforming floating rate liabilities into fixed rate liabilities and sometimes
require the posting of cash collateral to the relevant hedging counterparties. Nevertheless, the Group has not
eliminated its exposures to interest rate risk and the Issuer cannot offer assurance that they will function as
intended.
Nevertheless, the Group has not eliminated its exposures to interest rate risk and ENEL cannot offer assurance
that they will function as intended and to the extent the Group fails to adequately manage the risks inherent in
interest rate volatility, the results of its operations may be adversely impacted. In addition, it is possible that the
hedging and derivative instruments used by the Group to establish a fixed rate for certain of its floating rate
liabilities may lock the Group into interest rates that are ultimately higher than actual market interest rates and
could also entail significant costs for the Group.
ENEL's ability to access credit and bond markets on acceptable terms is in part dependent on its credit
ratings, which have come under scrutiny due to its level of debt
ENEL's long-term debt is currently rated "BBB+" (stable outlook) by S&P Global Ratings ("S&P"), "BBB+"
(stable outlook) by Fitch Ratings Ltd ("Fitch") and "Baa2" (stable outlook) by Moody's Investors Service
("Moody's"). The credit ratings included or referred to in this Offering Circular will be treated for the purposes
of Regulation (EC) No. 1060/2009 (as amended) on credit rating agencies (the "CRA Regulation") as having
been issued by S&P, Moody's and Fitch upon registration pursuant to the CRA Regulation. S&P, Moody's and
Fitch are established in the EU and registered under the CRA Regulation. Each of Moody's, S&P and Fitch is
included in the list of registered credit rating agencies published by the European Securities and Markets
Authority on its website (http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance
with the CRA Regulation. Each of these ratings is near the low-end of the respective rating agency's scale of
investment-grade ratings. ENEL's ability to access the capital markets and other forms of financing (or
refinancing), and the costs connected with such activities, depend on the credit ratings assigned to the Issuer. In
addition, any future downgrade of the sovereign credit rating of Italy and/or Spain or the perception that such a
downgrade may occur may adversely affect the markets' perception of ENEL's creditworthiness and have a
negative impact on the Group's credit ratings. Any worsening of credit ratings could limit ENEL's ability to
access capital markets and other forms of financing (or refinancing), or increase the costs related thereto, with
related adverse effects on the Issuer's and the Group's business prospects, financial condition and results of
operations as well as its ability to implement the 2018-2020 Strategic Plan, which contemplates a significant
amount of capital expenditure (See "ENEL's ability to successfully execute its 2018-2020 Strategic Plan is not
assured").
2

Certain credit agreements entered into by companies belonging to the Group, state that the overall pricing
applicable to the loans there under may vary according to ENEL's credit rating by S&P or Moody's. Any
downgrade could thus affect the amount of interest payable by ENEL. In addition, the possibility of access to
the capital markets, to other forms of financing and the associated costs is also dependent, amongst other things,
on the rating assigned to the Group. Therefore any reduction of such ratings could limit ENEL's access to the
capital markets, and could increase the cost of borrowing and/or the refinancing of the existing debt. Any
downgrade could therefore have adverse effects on the Issuer's and the Group's business prospects, financial
condition and results of operations.
ENEL's ability to successfully execute its 2018-2020 Strategic Plan is not assured.
On 21 November 2017, ENEL's Board of Directors announced the Group's 2018-2020 Strategic Plan (the
"Strategic Plan"), which contains the strategic guidelines and growth objectives of the Group for the relevant
period, as well as some forecasts with regard to the Group's expected results of operations. The Strategic Plan
contemplates, among other things, cost reductions by 2020 of 7 per cent. (in nominal terms) compared to 2017,
an investment program of Euro 24.6 billion between 2018 and 2020 and including Euro 3.4 billion of capex
under the build, sell and operate ("BSO") model, investments for the 2018-2020 period of 5.3 billion for the
digitalisation of Group assets, people and customers, a capital expenditure program for a total of 4.7 billion
on network infrastructures and 8.3 billion for renewable capacity objectives to sustain the Group's plan for a
total decarbonisation of the generation mix by 2050 and 800 million of investments in e-Solutions. For further
information see ``BusinessStrategy''. The Strategic Plan and the projections contained therein are based on a
series of critical assumptions, including among others the evolution of demand and prices for electricity, gas,
fuels and average investment costs for the plants in the markets in which the Group operates, trends in relevant
macroeconomic variables, and the evolution of the regulatory frameworks applicable to the Group.
Achievement of the Strategic Plan objectives depends on both the timing of execution and the values realised
from any disposal/acquisition. The strategic priorities set forth in the Strategic Plan also include an improvement
of the operational efficiency and an acceleration of the industrial growth. In the event that one or more of the
Strategic Plan's underlying assumptions proves incorrect or events evolve differently than as contemplated in
the Strategic Plan (including because of events affecting the Group that may not be foreseeable or quantifiable,
in whole or in part, as of the date hereof) the anticipated events and results of operations indicated in the
Strategic Plan (and in this Offering Circular) could differ from actual events and results of operations. The
Strategic Plan should not be unduly relied upon in any way by any investor in making an investment decision
with respect to any Securities offered hereunder. Furthermore, this Offering Circular contains certain statements
and estimates regarding the Group's competitive position in certain markets, including with respect to its pre-
eminence in particular markets. Such statements are based on the best information available to the Group's
management as of the date hereof. However, the Group faces competitive risks and its market positions may
diverge from those expressed herein as a result of a variety of factors. Any failure by the Group to execute its
Strategic Plan or maintain its market positions could have a material adverse effect upon the Group, its business
prospects, its financial condition and its results of operations.
The Group faces risks relating to political, social or economic instability in some of the countries where
the Group operates.
For the year ended on 31 December 2017, the Group's EBITDA from markets outside of Italy represented
approximately 56 per cent. of the Group total Group's activities outside of Italy (in particular Russia and certain
South American countries) are subject to a range of country-specific business risks, including changes to
government policies or regulations in the countries in which it operates, changes in the commercial practice,
the imposition of monetary and other restrictions on the movement of capital for foreign corporations, economic
crises, state expropriation of assets, the absence, loss or non-renewal of favourable treaties or similar agreements
with foreign tax authorities and general political, social and economic instability. Such countries may also be
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characterised by inadequate creditors' protection due to a lack of efficient bankruptcy procedures, investment
restrictions and significant exchange rate volatility.
Systemic (i.e. not diversifiable) risks, referred to as country risk, could have a material adverse effect on ENEL's
business returns and, in order to effectively monitor them, ENEL regularly carries out a qualitative assessment
process of the risks associated with each country where the Group operates. In addition, ENEL has developed
a quantitative model using shadow rating approach in order to support processes for rating strategic investments
in the context of industrial planning and business development.
There can be no assurance that these policies cover all of the potential liabilities which may arise in connection
with country risk. Therefore, the occurrence of an event not covered, or partially covered, could have a material
adverse effect upon the Group, its business prospects, its financial condition and its results of operations.
ENEL conducts its business in several different currencies and is exposed to exchange rate risks,
particularly in relation to the rate of exchange between the Euro and the U.S. dollar
The Group is exposed to exchange rate risks in relation to cash flows connected to the purchase and/or sale of
fuels and electricity on the international markets, cash flows related to investments or other financial income or
expenses denominated in foreign currencies, such as dividends deriving from non-consolidated foreign
subsidiaries, cash flows related to the purchase or sale of equity participations, and indebtedness in currencies
different from those used in the countries where the Group has its principal operations. The Group has
significant exposure to fluctuations of the Euro against the U.S. dollar and the currencies of the South American
countries in which the Group is present, which have recently been subject to market volatility.
With reference to the transaction risk, which is the risk arising from the revaluation of assets and liabilities, the
main source of risk is represented by debt denominated in foreign currencies. At 31 December 2017, 47 per
cent. of the Group long-term debt was denominated in currencies other than euro, compared to 44 per cent. as
of 31 December 2016. Furthermore, the percentage of debt not hedged against foreign exchange risk amounted
to 17 per cent. at 31 December 2017, compared to 18 per cent. at 31 December 2016. Any future significant
variations in exchange rates affecting the currencies in which the Group operates and/or failure of the Group's
related hedging strategy could materially and adversely affect ENEL's and the Group's financial conditions and
results of operations.
Revenues and costs denominated in foreign currencies may be significantly affected by exchange rate
fluctuations, which may have an impact on commercial margins (i.e., economic risk), and commercial and
financing payables and receivables denominated in foreign currencies may be significantly affected by
conversion rates used for profit and loss computation.
Furthermore, because the Group's consolidated financial statements are expressed in Euro but the financial
statements of several subsidiaries are expressed in other currencies, negative fluctuations, in exchange rates
could negatively affect the value of consolidated foreign subsidiaries' assets, income and equity, with a
concomitant adverse effect on the Group's consolidated financial statements (i.e., translation risk). For instance,
due to the translation effect, an appreciation of the Euro against our significant other currencies, including the
U.S. dollar, would adversely affect our results.
Exchange rate risk is managed in accordance with the Group financial risk management policies, which provide
for the stabilisation of the effects of fluctuations in exchange rates to avoid such risk. To this end, the Group
has developed operational processes that ensure the systematic coverage of exposures through appropriate
hedging strategies, which typically involve the use of financial derivatives and the posting of cash collateral to
our hedging counterparties. However, hedging instruments may not be successful in protecting the Group
effectively from adverse exchange rate movements.
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Risks related to the adverse financial and macroeconomic conditions within the Eurozone
Since 2013 the global economy has grown at a modest pace, curbed by the stagnation of economic activity in
parts of Europe, as well as the slow-down of several emerging economies. In the Eurozone, the pace of
economic recovery has lagged behind that of other advanced economies following the prior global recession,
including as a result of the sovereign debt crisis that affected several European countries, including Italy and
Spain. While economic growth has picked up in a few Eurozone countries over the past year, recovery remains
relatively weak, particularly in Italy. Deflationary pressures, along with persisting weaknesses in the financial
sector and in the job market, decreasing levels of savings among families, decreased consumer spending and
reform fatigue weigh negatively on the outlook.
The economic recovery of the Eurozone may also be jeopardised by the current political instability affecting
several countries, ranging from the UK's decision to leave the EU (as described in more detail below under
"The United Kingdom's decision to withdraw from the European Union may have a negative effect on global
economic conditions, financial markets and our business"), to the possible exit from the European Union of
more Member States and/or the replacement of the Euro by one or more successor currencies to which the
foregoing could lead. The political uncertainty in Italy resulting from the March 2018 elections and in Spain
following the October 2017 referendum on secession from Spain promoted by the Catalan regional government
and add uncertainties they could affect the Italian and Spanish economies.
These events could have a detrimental impact on the global economic recovery and the repayment of sovereign
and non-sovereign debt in certain countries, as well as on the financial condition of European institutions,
further increasing the volatility in the European financial markets.
There can be no assurance that the economy in Europe will not worsen, nor can there be any assurance that
current or future assistance packages or measures granted to certain Eurozone countries will be available or,
even if provided, will be sufficient to stabilise the affected countries and markets and secure the position of the
Euro. These risks are especially significant in Italy and Spain, where a large proportion of the Group's European
operations are concentrated. The economic downturn may also impact our customers and may result in their
inability to pay the amounts owed to us. Continuation of further worsening of these difficult financial and
macroeconomic conditions could have a material adverse effect upon the Group, its business prospects, its
financial condition and its results of operations.
The United Kingdom's decision to withdraw from the European Union may have a negative effect on
global economic conditions, financial markets and our business
On 29 March 2017 the UK delivered to the European Council notice of its intention to withdraw from the EU,
pursuant to Article 50 of the Treaty on the European Union. The delivery of such notice started a two-year
period during which the UK shall negotiate with the EU the terms of its withdrawal and of its future relationship
with the EU. If the parties fail to reach an agreement within this time frame, all EU treaties cease to apply to
the UK, unless the European Council, in agreement with the UK, unanimously decides to extend this period.
Absent such extension and subject to the terms of any withdrawal agreement, the United Kingdom shall
withdraw from the European Union no later than 29 March 2019. There are a number of uncertainties in
connection with such negotiations, including their timing, and the future of the UK's relationship with the EU.
In addition, the UK's decision to withdraw from the EU has also given rise to calls for the governments of other
European Union member states to consider withdrawal. These developments, or the perception that any of them
could occur, have had and may continue to have a material adverse effect on global economic conditions and
the stability of global financial markets, and may significantly reduce global market liquidity and restrict the
ability of key market participants to operate in certain financial markets, which could in turn depress economic
activity and restrict our access to capital. Until the terms and timing of the UK's exit from the EU are clearer,
it is not possible to determine the impact that the UK's departure from the EU and/or any related matters may
have on the stability of the Eurozone or the European Union and, ultimately, on the business of the Group. As
5