Iberdrola surprises the market once again. The company has set the terms and conditions of a new €1 billion green hybrid bond, as reported to the Spanish National Securities Market Commission (CNMV). The volume of demand and the conditions of this operation once again demonstrate the great confidence of the market and investors in the solidity and solvency of the energy company's business and growth plans. This operation will serve to maintain the volume of hybrids alive, as advanced in its strategic plan presented on 9 November 2022, before the exercise of the option to repurchase the 1,000 million hybrid bonds already issued in 2017.
Like the rest of Iberdrola's hybrids, the bond issued is perpetual, but has an option to repurchase at par after five and a half years. Subsequently, Iberdrola will be able to repurchase the bond annually, coinciding with the coupon payment date.
The coupon has been set at 4.875%. These conditions are very advantageous as it is a subordinated instrument. Iberdrola's last issue of this type of debt was in November 2021, with a current portfolio of 8,250 million hybrids.
The company has issued 1,000 million euros, taking advantage of good market conditions, limiting the risks of interest rate rises or a possible worsening in the credit markets. In this way, Iberdrola will continue to maintain its excellent financial health.
Moreover, 50% of the hybrid bonds count as capital, in accordance with the methodology of the main rating agencies, which means that this operation contributes to maintaining the group's credit ratings.
The demand registered reflected the strong interest of fixed income investors in Iberdrola, reaching EUR 7,000 million, seven times the offer. This was made possible by the participation of nearly 360 qualified international investors, mainly from Europe and the UK.
The funds raised will be used to refinance the analogous transaction made in 2017 and will continue to finance the same assets that were financed with it (onshore wind farms in the UK).