Iberdrola raises €1bn via oversubscribed green hybrid bond sale today

• Iberdrola issued a €1 billion green hybrid bond to refinance a 2026 hybrid maturity, drawing strong demand and reinforcing its balance sheet for grid-green capex.

Iberdrola has completed a €1 billion green hybrid bond issuance that drew heavy investor interest, with proceeds earmarked to refinance a hybrid instrument maturing in early 2026 and to support the group’s ongoing investment program. The deal underscores persistent appetite for high-quality, transition-aligned credit even as rates remain elevated and capital markets stay selective.

Hybrid bonds sit between debt and equity in a utility’s capital stack: they count toward equity credit for ratings purposes while offering investors a pickup over senior debt. For Iberdrola, the instrument diversifies funding, supports metrics, and keeps weighted average cost of capital competitive as the company channels capex into regulated networks, renewables and flexibility assets.

Demand strength reflects a few pillars. First, predictable, inflation-linked earnings from U.S. and U.K. networks provide ballast. Second, the company’s global renewables pipeline—onshore/offshore wind, utility-scale solar, and co-located storage—continues to convert development into operating cash flow. Third, disciplined asset rotation has recycled capital from mature projects into higher-return growth areas without over-levering the balance sheet.

Green labeling ties the proceeds to eligible categories under Iberdrola’s framework, typically including grid modernization (smart meters, digital substations, interconnections), renewable generation and storage. Investors expect transparent allocation and impact reporting—emissions avoided, renewable capacity added, and grid-loss reductions—over the bond’s life.

Market context matters, too. Utilities with scale, geographic diversity, and credible transition roadmaps have retained strong market access. By terming out hybrid capital now, Iberdrola reduces refinancing risk ahead of the 2026 maturity and preserves flexibility to pounce on supply-chain slots for long-lead equipment—transformers, switchgear, HV components—that still dictate build schedules.

Risks remain: permitting timelines, interconnection queues, and input costs can pressure delivery. But with funding secured and portfolio optionality across regions, Iberdrola appears positioned to keep investing through cycles while maintaining credit discipline.

The takeaway: this is classic balance-sheet housekeeping done at scale—locking attractive hybrid funding to back the pipes-and-wires plus green-build strategy that has defined Iberdrola’s past decade.