Iberdrola has successfully placed an €800 million hybrid green bond, receiving overwhelming interest with demand 3.75 times oversubscribed, totaling more than €3 billion from over 200 international investors. The bond, which offers a competitive 4.25% coupon, marks the company’s most attractive hybrid issuance in the past three years, reflecting a strong market reception and investor trust in Iberdrola’s long-term strategy and sustainability goals.
Record Investor Interest and Strategic Issuance
The hybrid green bond, launched in the Euromarket, is a perpetual bond with a par call option set for August 2030. Despite a challenging market environment, driven by geopolitical instability and rising interest rates, Iberdrola secured this deal with minimal premium, highlighting its financial strength and stability. The record oversubscription is a testament to investor confidence in Iberdrola’s leadership in the renewable energy sector and its solid credit profile.
With the proceeds of this issuance, Iberdrola plans to refinance renewable assets that were linked to a previous 2019 hybrid bond. As a result, the company’s hybrid capital stack will remain steady at €8.25 billion, continuing its strategic approach to financing while supporting ongoing investments in clean energy.
Sustainable Finance Leadership
This bond issuance underscores Iberdrola’s continued commitment to sustainable finance and its leadership in green bond markets. The bond issuance is part of the company’s broader strategy to fund its transition towards renewable energy. Hybrid bonds are viewed favorably by major credit rating agencies, as they are classified as 50% equity, helping Iberdrola maintain robust credit ratings while executing its growth plans.
Iberdrola’s ongoing success in securing sustainable finance demonstrates its capacity to balance growth with financial prudence. This hybrid green bond issuance marks the company’s eighth market operation in 2024, raising a total of €6.6 billion across several currencies and markets—a reflection of its diversified financing strategy.
Broader Market Activity in 2024
Iberdrola has been active in international markets throughout the year, securing funds through various instruments:
- January: €700 million hybrid bond issuance
- June: CHF 335 million raised in Switzerland
- July: €750 million senior bond issuance
- September 23: €2.15 billion senior debt issuance—its largest-ever
- October: €500 million green bond issuance in Sterling
- November: A successful A$750 million green debt issuance in Australia
Notably, Iberdrola remains the only European utility to carry out transactions in multiple currencies, including Swiss francs, British pounds, Australian dollars, and Norwegian kroner in 2024.
Strong Support from International Banks
The hybrid green bond issuance was facilitated by nine leading banks, including BNP Paribas, HSBC, JP Morgan, and Santander, who helped Iberdrola tap into a diverse investor base. Their participation allowed the company to secure favorable terms, reinforcing Iberdrola’s leadership in sustainable finance and its ability to attract global capital in a competitive market.
Conclusion: Strengthening Sustainability and Financial Position
This issuance not only strengthens Iberdrola’s position as a key player in the global renewable energy sector but also highlights the company’s ability to navigate market challenges while advancing its sustainability objectives. The overwhelming demand for this hybrid green bond is a strong endorsement of Iberdrola’s strategy, positioning it as a leader in both sustainable finance and the green energy transition.
References:
- Iberdrola Green Finance Report: Iberdrola Sustainability
- Sustainable Bond Principles: ICMA Green Bond Principles
- Hybrid Green Bonds Overview: Sustainable Finance Overview
