S&P gives Iberdrola green notes BBB-

S&P said it gave its BBB- issue rating to Iberdrola SA’s proposed undated, optionally deferrable, subordinated hybrid capital securities. Financing subsidiary Iberdrola International BV will sell the notes.

The offering is expected to be of benchmark size but remains subject to market conditions and split into two tranches. “We anticipate that the total amount of outstanding hybrids will thus potentially increase from the current outstanding amount of €5.5 billion but, in any case, represent less than 15% of Iberdrola’s total capitalization from our estimate of less than 10% currently,” S&P said in a press release.

“This transaction is in line with the strategy Iberdrola outlined in its new 2020-2025 strategic plan. More specifically, this envisions issuing €2 billion of hybrids in 2021, €1.5 billion in 2022, and €1 billion in 2023 to increase rating headroom as its capital expenditure (capex) accelerates,” S&P said.

The proceeds will be used for green purposes, notably to finance its renewables projects in whole or in part. “We note that the bond’s green features do not affect our credit assessment of the instrument,” the agency said.

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