The finance department at Italian electricity company Enel has a clear mandate: to reduce and then stabilise cost of capital. It is a simple goal, and one that it has attained. Enel’s weighted average cost of debt stood at 4.4% for the first nine months of the year, falling from 5.9% in 1999 and 7.6% in 1997.
To achieve this, however, the former state-owned monopoly has taken a strong and simple stance on derivatives – which it now considers just one set of tools to manage its e25
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