Bond market volatility and strong third-quarter results from GEK TERNA’s operating motorways make the infrastructure group’s shares an investment opportunity, Santander said in a research note.
The investment bank said GEK TERNA’s decision not to proceed with a eurobond issue — for which it has a 12-month window — should be seen as a sign of strength and a move to protect its shareholders. The Group has “ample” liquidity at parent-company level and therefore has no need to issue a bond.
As a result, Santander said, today’s market reaction is unwarranted and presents a buying opportunity, following the solid performance of the motorways in GEK TERNA’s concessions portfolio. On this basis, the investment bank set a €62 price target and maintained its Outperform rating, implying upside of more than 63% from current levels.
Focusing on the Group’s financial structure, Santander noted that:
-GEK TERNA’s recourse gross debt is limited, with maturities evenly staggered between 2027 and 2032. Like most infrastructure groups, GEK TERNA has two distinct levels of debt: with and without recourse (non-recourse). Its recourse debt consists entirely of corporate bonds, with a nominal value of €1.3 billion on a gross basis, and is comfortably staggered over the 2027–2032 period. The next maturity falls due in July 2027 and is a €500 million senior unsecured bond.
-GEK TERNA has ample liquidity at parent-company level with recourse (€1.9 billion in the first half of 2026) and therefore, in Santander’s view, has no need for a new bond issue. As at 30 June 2026, GEK TERNA’s gross cash with recourse stood at about €1.3 billion, more than twice the principal of the bond maturing in July 2027.
Including the €0.7 billion raised in the July share capital increase, pro forma gross cash with recourse amounts to about €1.9 billion, or nearly four times the principal of the July 2027 bond. This clearly shows that GEK TERNA has no funding needs and that its decision earlier this week to approach the corporate bond market was purely opportunistic, rather than being driven by refinancing needs.
- The vast majority (77%) of GEK TERNA’s gross debt is non-recourse, with the cost of funding fixed for the full term of the underlying concessions.
- 93% of GEK TERNA’s total debt carries a fixed interest rate, leaving the Group fully insulated from interest rate movements.
- GEK TERNA’s motorways benefit from 100% adjustments in line with the Consumer Price Index.
- GEK TERNA’s cost of borrowing remains low. As at 30 June 2026, its weighted average cost of borrowing, including corporate debt with and without recourse, stood at just 3.8%. This is among the lowest rates for European transport infrastructure companies covered by Santander. Excluding non-recourse debt, the average cost of recourse borrowing was lower still, at 2.5%.