Bilbao-based renewable energy giant Iberdrola said it has become the first Spanish company to issue a bond under the new EU green bond standard (EU GBS).
It has done so in an operation that allows it to raise €750 million over 10 years.
The company said it is also the first firm in the world to issue a bond that simultaneously complies with the EU GBS and the Green Bond Principles of the International Capital Market Association (ICMA)
“Demand was five times the amount placed, reaching the largest book of a senior Iberdrola transaction since 2021, demonstrating investor confidence in the utility and investor appetite for this type of green instrument, which brings together the best market standards for the first time,” said Iberdrola.
“The 750 million raised from the issue closed today will be used for the company’s various renewable projects, some already in operation and others under construction.
“This issue has attracted the attention of investors and has obtained a strong demand of more than 3.7 billion euros, which has allowed to obtain a final credit spread of 110 basis points over the corresponding reference (midswap at that ten-year term), a level that has allowed to fix a coupon of 3.5%.
“The total cost represents a negative issue premium over the theoretical value of the bond according to the secondary market, the lowest of all issues since the announcement of the Trump Administration’s tariffs.
“In the end, more than 170 investors participated in the transaction. In the end, more than 170 investors participated in the operation, with the placement being distributed in the United Kingdom (32%), France (28%), Germany (11%), Benelux (10%), Spain (9%) and other European countries (10%), with 93% of the investors being sustainable.
“This is Iberdrola’s second public operation, after the green bond indexed to its share price launched last March with which it raised 400 million euros over five years with a coupon of 1.5%.”
Bank of China, BBVA, CIC, Crédit Agricole, Deutsche Bank, HSBC, MUFG and UniCredit participated in the placement.
Iberdrola added: “The transaction allows the company to strengthen its already comfortable liquidity position of 20.9 billion euros at the end of March, at excellent conditions and at a good market moment, while offering investors the possibility of participating in a senior Iberdrola transaction in the first part of the year.
“Iberdrola is characterised by its ability to combine international growth with great financial strength. In fact, at the end of the first quarter Iberdrola increased its operating cash flow (FFO) by 11% to over 3,500 million euros, enabling it to maintain its financial strength and rating after consolidating ENW.
“The cash flow to net debt ratio was 22.3% in the first three months of the year.”