KEY IMPACT POINTS:
- Iberdrola raises €750M via the first-ever green bond compliant with both the EU Green Bond Standard and ICMA’s Green Bond Principles.
- Demand exceeded €3.7B—five times the issue—enabling a 3.5% coupon and favorable pricing conditions.
- Proceeds will fund renewable energy projects, supporting Iberdrola’s growth and €20.9B liquidity position.
Iberdrola Breaks New Ground in Green Finance
Iberdrola has become the first company globally to issue a green bond that complies with both the European Union Green Bond Standard (EU GBS) and the Green Bond Principles established by the International Capital Market Association (ICMA).
The Spanish utility raised €750 million through a 10-year senior bond, reinforcing its dual commitment to sustainability and financial robustness. “Iberdrola strengthens its commitment to financial soundness and sustainability by meeting ICMA requirements and the EU’s new European green bond standards,” the company stated.
Overwhelming Investor Demand
Investor interest surged, with demand reaching over €3.7 billion—five times the issue amount—marking the largest order book for an Iberdrola senior transaction since 2021.
This enabled the bond to be priced with a final spread of 110 basis points over the 10-year midswap and a fixed coupon of 3.5%. The pricing reflected a negative issuance premium compared to theoretical secondary market levels— the most competitive since the U.S. tariffs announced during the Trump Administration.
More than 170 investors participated in the placement, with 93% classified as sustainable investors. Distribution was strongest in the United Kingdom (32%), France (28%), and Germany (11%).
Backing Renewable Expansion
Proceeds from the bond will fund Iberdrola’s renewable energy portfolio, including operational and in-progress projects. This marks Iberdrola’s second public deal of the year, following a €400 million green bond issued in March, linked to its share price.
The placement involved global banking partners including Bank of China, BBVA, CIC, Crédit Agricole, Deutsche Bank, HSBC, MUFG, and UniCredit.
Strong Financial Standing and Outlook
The deal boosts Iberdrola’s already solid liquidity of €20.9 billion as of March-end and adds to its momentum entering the year’s first half. The company reported an 11% increase in funds from operations (FFO), reaching over €3.5 billion, while maintaining a healthy cash flow-to-net debt ratio of 22.3%.
Iberdrola projects double-digit adjusted net profit growth for 2024, driven by its diversified strategy across renewables and grid assets, and expects to bring nearly 4,000 MW of new renewable capacity online—fully contracted for 2025.
Related Article: Nearly 90% of Iberdrola’s Production is Now Emission-free
