Iberdrola has made headlines by issuing a €750 million bond under the new European standard for EU green bonds (EU GBS). This significant funding will be allocated to various renewable energy projects, some already operational and others currently under construction.
What sets this bond issuance apart is that Iberdrola claims it is the first in the world to issue a bond that simultaneously complies with both the EU GBS and the Green Bond Principles established by the International Capital Markets Association (ICMA). This innovative approach showcases the company’s commitment to sustainability and sets a new benchmark in the green finance sector.
The bond has attracted an overwhelming response from investors, with demand reaching more than €3.7 billion—five times the initial amount placed. This surge in interest has resulted in the largest book of a senior operation by Iberdrola since 2021, reflecting strong investor confidence in the company and the growing appetite for green instruments.
The final credit margin was set at 110 basis points over the corresponding reference rate, allowing for a coupon rate of 3.5%. Notably, this represents a negative issue premium compared to the theoretical bond value in the secondary market, marking the lowest cost recorded for Iberdrola since the announcement of tariffs under the Trump Administration.
More than 170 investors participated in this operation, with placements distributed across various regions: the United Kingdom (32%), France (28%), Germany (11%), Benelux (10%), Spain (9%), and other European countries (10%). Impressively, 93% of investors identified as sustainable, underscoring the strong commitment to environmentally friendly investments.
This bond issuance is Iberdrola’s second public operation this year, following a green bond linked to its share price in March, which raised €400 million with a 1.5% coupon over five years. Major banks, including Bank of China, BBVA, CIC, Crédit Agricole, Deutsche Bank, HSBC, MUFG, and UniCredit, participated in the placement.
The funds raised will bolster Iberdrola’s liquidity position, which stood at €20.9 billion at the end of March. This solid financial foundation allows the company to secure excellent conditions in today’s market while offering investors a chance to engage in a prominent Iberdrola operation early in the year.
Iberdrola’s diversified business strategy focuses on selective investments in renewables and significant growth in energy networks. The company anticipates a double-digit increase in adjusted net profit by 2024, driven by positive impacts from regulated assets and U.S. accounting standards.
Moreover, Iberdrola plans to bring approximately 4 GW of renewable energy online this year, with a goal of selling 100% of that energy by 2025. This ambitious vision reflects the company’s commitment to leading the charge in sustainable energy and reducing reliance on fossil fuels.
As Iberdrola continues to innovate in the green finance space, this bond issuance not only strengthens its position in the renewable sector but also sets a precedent for future sustainable investments across Europe.
