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Iberdrola continues to diversify its sources of financing. The company, chaired by Ignacio Galán, has issued 12-year green bonds for 500 million pounds (600 million euros). This is Iberdrola’s largest issue in sterling since 2009. The company last issued a bond in Sterling in 2019, through its subsidiary Scottish Power Transmission. In addition, it is its first green bond Iberdrola has issued in sterling. Iberdrola becomes the only European utility able to access EUR, GBP and CHF in 2024.

Demand exceeded 2.1 billion pounds (2.5 billion euros), and this has allowed the spread over the reference interest rate to be reduced to 95 basis points (from the initial 125 basis points). This is the largest reduction recorded in this market by a recurring issuer this year. The coupon has been set at 5.25%, after attracting the interest of more than 140 investors (the largest number for a corporate issuer in the sterling market this year), especially those committed to ESG, thanks to the green nature of the transaction, which will finance future investments in the United Kingdom in the renewables business. 

Barclays, HSBC, Goldman Sachs and NatWest all participated in the issue. Iberdrola is the only Spanish corporation to access the GBP market in 2024.

This is the sixth public transaction by Iberdrola in the market so far in 2024. The first was the hybrid bond of 700 million euros issued in January; the second, in the Swiss market for 335 million francs at the end of June; the third, the senior bond for 750 million euros issued in July; the fourth was carried out in August, when Iberdrola placed 525 million dollars (490 million euros) through the US subsidiary; and the fifth took place on September 23, when it sold 2.15 billion euros in the largest issue of senior debt in its history. 

The rate achieved is equivalent to that which would have been obtained in the Euromarket, with additional value of diversification of currency.

The cost obtained is equivalent to the result that would have been obtained in the Euromarket, with the beneficial diversification effect of having achieved it in an alternative market. With this operation, Iberdrola becomes the only Spanish corporate issuer to access the sterling market in 2024, as well as the only European utility to have accessed the euro, Swiss franc and pound market in 2024.

International confidence

Market confidence in Iberdrola is constant. In addition to debt issues, last Monday the utility signed a 120 million loan with the European Investment Bank (EIB) for the development of energy innovation projects. It has also extended its partnership with the World Bank with a 300 million green loan for renewable projects in emerging countries.

In addition, it has signed a EUR 500 million syndicated green loan with Cesce coverage together with ICO, Sabadell and HSBC, and in the first quarter of 2024 it signed another EUR 700 million green loan with the European Investment Bank for the expansion of electricity grids in Spain.

At the end of December 2023, the company signed its largest credit line in history for 5.3 billion euros with 33 international banks. The cost of this operation was at the most competitive levels for Iberdrola, with prices similar to those of 2019, and the operation was oversubscribed by more than 40%, demonstrating the strong commitment of the banks to Europe's leading utility by capitalisation.

This financial strategy complements and strengthens the historic investment plan launched by the company in March 2024. This roadmap, the implementation of which is a year ahead of schedule, aims to drive the electrification of the economy, with a strong boost to electricity grids and renewables.