Iberdrola has closed a accelerated placement of bonds in the Euromarket amounting to 200 million euros and maturing in November 2022, in a record operation for the energy company with the lowest cost in its history, despite the macroeconomic context and the volatility of the markets.
Specifically, the annual cost to the company is fixed, and in this case it is below -1%, including all the costs of the operation, which generates significant savings compared to the standard bond market.
As this is the extension of an existing issue, the coupon remains at 0%. The final return to be received by investors will be determined based on the evolution of the listed price of Iberdrola shares.
Furthermore, these advantageous conditions found in the market have led the group to close at 200 million euros, against the maximum of 150 million euros initially announced, of the expansion of the issuance of a structured bond carried out in November 2015 and linked to the share price, replicating its characteristics and in no case requiring the issuance of new shares of the company, so the participation of the shareholders will not be diluted.
In this way, the strong interest of investors in the company is once again revealed, even in times of great economic uncertainty such as the current ones due to the Covid-19 crisis.
This It is the third emission since the crisis began due to the coronavirus pandemic, including those carried out by the holding company and its US subsidiary Avangrid last April.
The new bonds, which will be listed on the Frankfurt Stock Exchange, incorporate an option for their holders whereby they will be able, from July 12, 2022 to October 3, 2022, to receive a cash payment as a settlement.
The amount of this payment, which will always be in cash, will be determined based on the evolution of the listed price of Iberdrola shares, with a reference price of 8.4641 euros per share, adjusted for the dividends that are distributed. .
The execution of this option will always have a cash payment as a counterpart, so Iberdrola will not issue new shares. In this way, the shareholders of the company will not see their participation diluted in any case.
The energy company has contracted Barclays Bank Ireland plc (the entity that directs this operation) to face the payments that may arise from the decision of the bondholders to execute the option, as well as to purchase a hedging option. identical to the embedded option sold to investors in the bond.
At the beginning of April, at the height of the pandemic, Iberdrola already became the first Spanish company to issue ‘green’ bonds in the midst of a crisis, placing 750 million euros over five years (June 2025). The demand received exceeded 6,000 million euros, thus multiplying the offer by eight, which set the coupon of the operation at 0.875%.
A week later, Avangrid placed another issue of ‘green’ bonds to five years for an amount of 750 million dollars (about 691 million euros).