Iberdrola has returned to the capital markets to refinance a hybrid bond maturing early next year, successfully placing €1 billion in green hybrid bonds, as reported to the Spanish National Securities Market Commission (CNMV).
Like all of Iberdrola’s hybrid instruments, the new bond is perpetual, featuring a repurchase option beginning in August 2031. The issue carries a 3.75% coupon—the lowest among all hybrid bonds issued this year and the lowest of its kind since March 2022.
As with its senior bond issued in May, Iberdrola’s new hybrid complies with both the ICMA Green Bond Principles and the European Union Green Bond Standard. This makes it the first hybrid bond to be structured under the EU’s new green framework.
Investor demand was exceptionally strong, exceeding €8 billion—an oversubscription of eight times the final offer. This robust appetite enabled Iberdrola to upsize the issue and significantly reduce financing costs. More than 400 qualified international investors participated, primarily from Europe and the United Kingdom. Notably, over 87% of the demand came from sustainable investors or those aligned with the UN Principles for Responsible Investment.
The company capitalized on a favorable market window following the release of its financial results, taking advantage of historically low financing costs and ahead of upcoming central bank meetings in the U.S. and Europe, as well as an expected increase in market supply.
Nine leading international banks acted as joint bookrunners: Barclays, Deutsche Bank, Mizuho, Crédit Agricole CIB, MUFG, ING, Intesa Sanpaolo, Wells Fargo, and CaixaBank, providing broad access to the investor base.
The geographical distribution of demand was led by the United Kingdom (31%), followed by France (19%), Germany (16%), Asia (5%), the U.S. and Canada (3.5%), and the Nordic countries (2.5%). By investor type, investment funds accounted for nearly 86% of allocations.
The strong demand and favorable conditions once again highlight investors’ confidence in Iberdrola’s financial strength, business model, and growth strategy. Proceeds from the transaction will be used to refinance a similar hybrid bond to be repurchased soon, maintaining the company’s hybrid debt volume stable at €8.25 billion—consistent with the commitment made at its recent Capital Markets Day in London.
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