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24/11/2016

There was a very positive response to the operation from the market and the demand from large investors in the Euromarket was oversubscribed more than three times

Iberdrola places fourth green bond issuance worth €750 million

  • The bonds issuance matures in March 2024 with a coupon rate of 1%. It was mainly placed with large international investors, most of whom are 'green' investors.
  • Independent agency Vigeo Eiris validated that the proceedings have been earmarked for refinancing wind farm investments in Spain  

Iberdrola has successfully placed a green bond issuance on the Euromarket, with proceeds earmarked for refinancing wind farm investments in Spain.

The value of the notes amounted to €750 million, with maturity in March 2024.The differential rate came at 77 basis points over midswap, with a 1% coupon payment.

The issuance price is very competitive in an environment affected by the volatility in interest rates and credit in the wake of the U.S. elections.  The placement was completed very satisfactorily thanks to the high demand from investors in green fixed securities.

The bond issuance today was over three times oversubscribed.  In this regard, green bonds usually generate higher demand due to the additional interest from socially responsible investors (SRI). In fact, most of the placement was subscribed by this type of investors, thereby enabling Iberdrola to go on diversifying its investor base and increasing the demand that improves these placements at times of market volatility.

One of the main features of green bonds is that the funds obtained are used to finance sustainable and socially responsible projects, under the certification of independent agency Vigeo Eiris.

Today's issuance is the fourth green bond placement by Iberdrola, in a repeat performance of the success attained in April 2014, when the company became the first Spanish company to enter the green bond market, and building on the previous placements in April and September 2016.

Iberdrola has consolidated its position as the company worldwide that has placed the most green bonds in 2016.[1].  

In parallell to this placement, Iberdrola has announced an offer to buy back bonds maturing in 2017 and 2018. The group intends to improve its financial costs for the next few years, extend debt duration and stagger maturity dates.

 

About Vigeo Eiris

Vigeo Eiris was founded in 2002. They have established themselves as Europe's leading experts in assessing companies and organisations for their practices and behaviours in the areas of environment, social responsibility and good governance..

The agency evaluates the degree of commitment of companies and public corporations to meeting environmental, social and corporate governance goals, as these are considered to be both risk factors and business opportunities when defining and developing their strategy.

In a release published about Iberdrola, Vigeo Eiris highlighted that the Group meets all the international requirements in terms of sustainable development and that it is positioned among the top-rated corporations assessed by Vigeo within the utilities industry.

Vigeo Eiris also stressed that Iberdrola's outstanding performance as regards environmental and human resources management is one of the company´s greatest strengths.

 

 

[1] Source: The Climate Bonds Initiative