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Iberdrola captures 1,000 million with a perpetual green bond at 4.785% per year

Date: April 21, 2024 Time: 02:54:14

Iberdrola has carried out this Friday an issue of ‘green’ hybrid bonds in the form of subordinated perpetual obligations for a total amount of 1,000 million euros, for which it has received a demand of 7,000 million euros, as reported by the company in a release.

The issue has been structured in a single tranche, with a nominal unit import of each of these bonds of 100,000 euros. The demand has allowed the annual fixed coupon to be lowered to 4.875%, compared to the price of 5.75% that the company had probed during the morning.

In the operation they have obtained some 360 ​​qualified international investors, mainly Europeans and the United Kingdom. The objective of this issuance is to refinance the hybrid bond that was issued in 2017. This instrument has a repurchase window between February and May 2023.

“The volume of demand and the conditions of this operation once again demonstrate the great confidence of the market and of investors in the solidity and solvency of the business and growth plans for energy”, highlighted Iberdrola.

Like the rest of the energy hybrids, it is a perpetual bond but it has the option of being repurchased after five and a half years. Subsequently, the energy company may exercise the repurchase option on an annual basis, coinciding with the coupon payment date.

As of the first review date, the obligations will accrue interest equal to the applicable five-year swap rate, plus a margin of 2.262% during the five years following the first review date. Between 2033 and 2043, the additional interest to the ‘swap’ will be 2.512% in each five-year review window. Subsequently, the rate will be fixed at 3.262% for subsequent review periods.

Under the terms of the issuance, Iberdrola has the option to defer interest payments on these instruments, without this being a cause of default. However, the deferred interest will be cumulative and must be paid in certain cases.

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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