FINANCIAL STRATEGY

A diversified investor base and reduced financing risk

Debt capital represents an important financing source for the Iberdrola Group. Central to Iberdrola's financial strategy is its target financial ratios.

Iberdrola seeks to, whenever possible, centralise its financing activities, however there are circumstances when the Group considers it necessary to arrange finance at the subsidiary level. This means that the majority of financing is conducted at the Iberdrola S.A. level or conducted through instruments with the guarantee of Iberdrola S.A.

Iberdrola S.A. places importance on having a diversified investor base and on reducing financing risks. Iberdrola therefore issues in different markets, currencies and with varying maturities.

The illustrations below show Iberdrola Group's solvency ratios and adjusted net debt at 30 June 2017.

Net Debt: 29,474. Credit Metrics. Net Debt, EBITDA: 3.8x. FFO, Net Debt: 21.6%. RCF, Net Debt: 19.4%. Leverage: 42.4%.

The slide below shows Iberdrola Group's liquidity position and debt maturity profile 30 June 2017:

Iberdrola Group's liquidity position at 30 June 2017
CREDIT LINE MATURITIES (€ MM) AVAILABLE
2018 & ONWARDS 6,720
TOTAL CREDITS LINES 6,976
CASH & SHORT TERM FINANCIAL INVESTMENTS 1,749
TOTAL ADJUSTED LIQUIDITY 8,725