IBERDROLA today placed a €600 million issue of 4-year eurobonds maturing in January 2016, thereby reopening the Spanish market for private debt as conditions improve following the summer volatility.
The operation, placed among 300 investors from 15 countries, was well oversubscribed with demand totalling more than €4.5 billion. Of the total takeup, 85% was from abroad.
Coupon was set at 4.75%, in line with all Group bond issues over the past two years which have been below 5%. Lead arrangers were BBVA, Deutsche Bank, Goldman Sachs International, ING Bank NV, Merrill Lynch International and Mizuho International.
This latest bond issue comes after Standard & Poor’s improved IBERDROLA’s outlook to stable from negative, based on the positive trend in the Company’s credit metrics with additional room for improvement over the medium term, despite adverse market conditions and the negative impact of Spain’s tariff deficit.
S&P attributes the improvement in IBERDROLA’s financial fundamentals to strong results, revenue from low-risk regulated businesses, lower investments and introduction of a scrip dividend.
This new bond issue, in addition to more than €2.5 billion previously raised in the capital markets this year, as well as a €3 billion bank refinancing in June, will enable IBERDROLA to meet its financing requirements for the foreseeable future.
With this operation, the Group also strengthens liquidity, which at June 2011 amounted to €10.3 billion, enough to cover its requirements for the next 24 months.
[mappress]
Source: iberdrola, October 14, 2011