Iberdrola places €2.15 billion in bonds for the purchase of the British ENW

Iberdrola, with €45.153 billion in debt at the end of the first half, has just completed the largest senior bond issuance in its history, raising €2.15 billion in the markets. This is the eighth financial operation—between loans and bond issuances—that the company led by Ignacio Galán has carried out this year, totaling €5.925 billion.

The senior bond issuance closed this Monday will, according to the company itself, finance its expansion in the UK, where it has purchased 88% of the English electricity distributor ENW, valued at €5 billion, including debt. If we add the senior bond issuance to the largest credit line in its history, subscribed at the end of 2023 (€5.3 billion), the external funds raised by Iberdrola exceed €11.245 billion. This amount represents almost 25% of its total debt and, taking advantage of the low interest rates in Europe and the United States, allows the Basque utility to refinance its leverage and gradually balance its maturities. This is essential to finance its ambitious investment plan of €41 billion until 2026.

Until mid-year, Iberdrola had shifted its leverage towards the short term; however, this senior bond issuance has an average maturity of 7.3 years, with a cost of less than 3.12%. According to Iberdrola’s communication to the CNMV, its subsidiary “Iberdrola Finanzas, S.A.” (Single-Member Company) closed a bond issuance in the euro market yesterday, structured in three tranches, guaranteed by IBE, for a total amount of €2.15 billion.

The first tranche of the bonds amounts to €650 million and matures on March 30, 2028, with a coupon of 2.625% per annum, having set the issuance price at 99.643% of its nominal value. The second tranche of the bonds amounts to €750 million and matures on September 30, 2031, with a coupon of 3.000% per annum, having set the issuance price at 99.373% of its nominal value. The third tranche of the bonds amounts to €750 million and matures on September 30, 2035, with a coupon of 3.375% per annum, with the issuance price set at 99.269% of its nominal value. The issuance, which has been carried out under the issuer’s Euro Medium Term Notes (EMTN) program, has been placed by a number of international banks.

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