Fitch rates Iberdrola notes BBB

Fitch Ratings said it assigned a BBB rating to Iberdrola International BV's €800 million green callable deeply subordinated capital securities.

The securities qualify for 50% equity credit.

The notes are unconditionally and irrevocably guaranteed by Iberdrola SA on a subordinated basis, Fitch said.

The hybrid debt issue is part of €2 billion of debt-related credit protection measures announced by management in February 2018, of which €700 million hybrid capital was already issued in March 2018, the agency said.

The proceeds will be used to finance or refinance eligible green projects, Fitch said.

The notes are rated two notches lower than Iberdrola's senior unsecured rating of A- given their deep subordination and consequently lower recovery prospects in a liquidation or bankruptcy scenario relative to the senior obligations, the agency said.

The notes only rank senior to the claims of equity shareholders, Fitch said.

The senior unsecured rating benefits from a one-notch uplift from the company's issuer default rating due to Iberdrola's defensive business mix, the agency said.

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