The transaction was placed with 180 new institutional investors, having received subscriptions totalling $6.6 billion
IBERDROLA ISSUES $2 BILLION IN BONDS IN THE U.S. TO SUPPORT EXPANSION IN THE COUNTRY
With this operation, the first by a Spanish energy sector company in the United States, it broadens its investor base
IBERDROLA thereby also continues to diversify its funding sources and confirms its long-term focus on the U.S. market
IBERDROLA yesterday placed a $2 billion bond issue in two $1 billion tranches of five and 10 years in the U.S. market, the first such operation by a Spanish energy sector company in this country and aimed at cementing the foundations for future growth in a market it considers strategic.
The issue, which met $6.6 billion in demand, more than triple the initial offering, was placed with 180 new qualified institutional investors, thereby expanding Iberdrola’s investor base. The success of the issue underlines U.S. investor interest in the Company and its ability to secure funding in diverse markets.
The spread was set at 108 basis points over dollar swaps for the 5-year tranche and 140 basis points over 10 years, improving on conditions obtained by other companies with similar ratings in dollar operations over equivalent maturities in the U.S. market.
Citigroup coordinated the issue and lead managers were Barclays Capital, Bank of America, Citi, Merrill Lynch and Goldman, Sachs & Co.
With this operation in bonds, IBERDROLA also diversifies its sources of funding, accessing a market which currently offers more depth and liquidity than Europe, as well as more attractive conditions, while reducing the weighting of its debt with banks.
It also strengthens the Company’s finances and increases liquidity to around/above €11 billion, enough to meet funding needs for 2009 and 2010. It follows other capital market issues by IBERDROLA over the past two years totalling €7.5 billion, as a result of which the average life of its debt has risen to above 6 years.