Iberdrola has made sustainable finance history by issuing the first-ever green bond aligned with both the EU Green Bond Standard (EU GBS) and the ICMA Green Bond Principles, raising €750 million in a landmark deal that highlights investor confidence in high-integrity ESG instruments.
The 10-year bond, issued with a 3.5% coupon, attracted overwhelming demand of more than €3.7 billion—over five times the offer. The high interest enabled Iberdrola to price the bond with a negative new issue premium, signaling a strong appetite for rigorously structured green finance products.
“This transaction brings together the best market standards for the first time,” the company said, underscoring its leadership in aligning sustainable financing with regulatory and investor expectations.
A Blueprint for Future Green Issuance
Iberdrola’s green bond breaks new ground by integrating the EU GBS, which imposes strict use-of-proceeds, external review, and transparency requirements, with the globally accepted ICMA Green Bond Principles. The dual compliance reinforces the bond’s credibility and may serve as a blueprint for future issuers navigating evolving sustainable finance regulations.
Key Highlights:
- Size: €750 million
- Maturity: 10 years
- Coupon: 3.5%
- Credit spread: +110 basis points over midswap
- Negative premium: Reflects pricing strength versus secondary market levels
- ESG investor base: 93% of allocations went to sustainability-focused investors
- Geographic distribution: UK (32%), France (28%), Germany (11%), Benelux (10%), Spain (9%), Other (10%)
Proceeds Powering the Green Transition
Funds from the bond will finance a range of renewable energy projects, including wind and solar farms currently under construction or recently completed. This aligns with Iberdrola’s strategic plan to expand its renewable capacity while reinforcing grid infrastructure and supporting energy transition goals across its global footprint.
Strong Financial Position and Market Leadership
The bond further strengthens Iberdrola’s liquidity, already at €20.9 billion as of March 2025. Backed by a robust 11% year-on-year increase in funds from operations (FFO) to €3.5 billion and a cash flow-to-net-debt ratio of 22.3%, the company remains on a solid investment-grade footing.
This marks Iberdrola’s second green market operation this year, following a €400 million sustainability-linked bondissued in March. Together, these issuances reinforce its standing as a pioneer in sustainable capital markets, combining financial discipline with environmental ambition.
The transaction was coordinated by a global syndicate, including Bank of China, BBVA, Crédit Agricole, CIC, Deutsche Bank, HSBC, MUFG, and UniCredit—reflecting the wide institutional support for innovative green financing tools.
