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- Global leader in sustainable and green finance
New successful financing operation by IberdrolaThe electricity supplier successfully placed a 10-year green bond worth $525 million (€490 million) in the US through the US-regulated grid company New York State Electric & Gas Company (NYSEG), a subsidiary of Avangrid. Demand exceeded €2 billion, reducing the spread to the reference interest rate to 135 basis points. This corresponds to transaction costs of 5.332%.
The ability of the company led by Ignacio Galán to access financing markets was confirmed in mid-August by a transaction on the US market that attracted the interest of major investors; more than 60 US accounts participated in the transaction. This is further evidence of the company’s ability to attract investors in different markets.
Europe’s largest electricity company by market value has this time taken advantage of the decline in long-term interest rates in the USA. Investor confidence in Iberdrola is at an all-time high and the issue had the added appeal of being green, which is attracting a growing number of investors. Iberdrola therefore paid a minimal new issue premium. The funds, which will be used to promote the network business in the United States, have just been disbursed.
The following banks participated in the transaction: BNP Paribas, MUFG, Wells Fargo, Santander, SMBC, Intesa and Commerzbank.
This transaction complements the transaction carried out by Iberdrola on August 1st together with ICO, Sabadell and HSBC.who have signed a syndicated green loan of €500 million with the backing of Cesce. This 15-year loan will help strengthen the diversification of Iberdrola’s financing sources.
The NYSEG loan is Iberdrola’s fourth public transaction this yearfollowing the EUR 700 million hybrid bond (subordinated debt) issued in January, the CHF 335 million placement on the Swiss market at the end of June and the EUR 750 million senior bond issued in July.
International trust
Market confidence in Iberdrola is constantLast month, the company placed a EUR 750 million senior bond with strong demand and a few weeks earlier it diversified its financing with the placement of a CHF 335 million green bond.
Additionally, In March, it signed a green loan of 700 million euros with the European Investment Bank for the expansion of electricity networks in Spain and in January, Iberdrola and the World Bank expanded their alliance with a €300 million green loan for renewable energy projects in emerging markets.
In the same month, the company issued hybrid bonds worth EUR 700 million, keeping the company’s hybrid volume stable at EUR 8.25 billion.The funds received were used to refinance the renewable assets financed by the hybrid bond issued in 2018, which was replaced by this operation.
At the end of December 2023, the company signed the largest credit line in its history for 5.3 billion euros with 33 international banksThe cost of this transaction was at a highly competitive level for Iberdrola, with prices similar to those in 2019, and the transaction was oversubscribed by more than 40%, demonstrating the banks’ strong commitment to Europe’s leading utility by capitalization.
Global leader in sustainable and green finance
Iberdrola has established itself as a global benchmark for sustainable financethe first private group in the world to issue green bonds, after being the first Spanish company to issue a bond of this type in 2014. The group currently has around €23 billion worth of green bonds outstanding.
In 2016, the company also issued the first green loan for an energy company on the banking market, amounting to 500 million euros.This transaction was followed by various loans and credit lines linked to sustainability criteria.
This financial strategy complements and strengthens the historic investment plan launched by the company in March 2024, in which it announced investments of €41 billion between 2024 and 2026.The plan aims to advance the electrification of the economy while significantly strengthening electricity grids and the use of renewable energy.
