Spanish utility Iberdrola said it has issued a €1 billion green hybrid bond to refinance an existing instrument maturing early next year, marking the first hybrid issuance under the European Union’s new Green Bond Standard.
The perpetual bond carries a 3.75% coupon and includes a call option from August 2031. Iberdrola said the rate is the lowest for any hybrid bond issued this year and the most competitive since March 2022.
Investor demand exceeded €8 billion — eight times the final issue size — allowing the company to increase the transaction and secure more favourable pricing, it said. More than 400 qualified investors participated, mainly from Europe and the United Kingdom, with over 87% identified as sustainable investors or aligned with the UN Principles for Responsible Investment (PRI).
“The transaction once again demonstrates investor confidence in Iberdrola’s financial strength and leadership in sustainable finance,” the company said in a statement.
The issue, compliant with both the International Capital Market Association’s (ICMA) Green Bond Principles and the EU Green Bond Standard, was arranged by a syndicate of nine banks including Barclays, Deutsche Bank and Caixabank.
Hybrid bonds are treated as 50% equity by major credit rating agencies, helping to bolster Iberdrola’s balance sheet, the company said. The latest transaction keeps the company’s hybrid volume at €8.25 billion, consistent with commitments made during its most recent Capital Markets Day.
This marks Iberdrola’s fourth public market operation in 2025, bringing total funding raised this year to €7.15 billion, which includes a €5 billion capital increase completed in July.
“The success of this green hybrid issue reinforces Iberdrola’s access to capital markets and its long-term commitment to financing the energy transition,” the company said.
