Iberdrola has issued a £500 million (€600 million) green bond with a 12-year maturity, marking the company's largest bond issue in sterling since 2009. The Spanish energy giant, led by Ignacio Galán, last accessed the sterling bond market in 2019 through its subsidiary, Scottish Power Transmission.
The green bond issuance aligns with Iberdrola's strategy to diversify its financing sources following its recent third-quarter earnings report. This is the company's first green bond in sterling, making Iberdrola the only European utility to have issued green bonds in EUR, GBP, and CHF in 2024.
The bond generated significant investor interest, with demand surpassing £2.1 billion (€2.5 billion). This enabled Iberdrola to lower the spread over the reference rate to 95 basis points, down from the initial 125 basis points—representing the largest reduction by a recurring issuer in the sterling market this year. The bond's coupon rate was set at 5.25%, drawing over 140 investors, particularly those focused on environmental, social, and governance (ESG) initiatives.
“This issuance underscores Iberdrola's commitment to funding renewable energy investments in the UK,” the company noted, emphasizing the bond's appeal among ESG-oriented investors. Barclays, HSBC, Goldman Sachs, and NatWest were involved in the transaction.
Iberdrola's activity in capital markets has been robust in 2024, with the green bond marking its sixth public issuance. The company previously issued a €700 million hybrid bond in January, followed by a CHF335 million bond in June, a €750 million senior bond in July, a $525 million bond via its U.S. subsidiary in August, and a €2.15 billion senior debt offering in September.
The bond's yield is equivalent to rates obtainable in the Euromarket, with the added advantage of currency diversification, according to Iberdrola.
