Fitch rates Iberdrola green debt BBB-

Fitch Ratings said it assigned Iberdrola International BV’s €1 billion proposed green callable deeply subordinated capital securities an expected rating of BBB-(EXP). The proposed securities would qualify for 50% equity credit.

The proposed notes will be unconditionally and irrevocably guaranteed by Iberdrola SA (BBB+/stable) on a subordinated basis.

Proceeds will be used to finance and/or refinance, in whole or in part, eligible green projects. Fitch expects the company to repay its existing €525 million hybrid debt in February 2018, therefore the new proposed instrument will be the only hybrid in the capital structure.

Fitch said the proposed notes are rated two notches below Iberdrola's long-term issuer default rating (BBB+/stable) given their deep subordination and consequently, lower recovery prospects in a liquidation or bankruptcy scenario relative to senior obligations.

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

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