Redeia issues its first European green hybrid bond to drive the ecological transition in Spain

Redeia, the global operator of essential infrastructures, has today issued its first European green hybrid bond for an amount of €500 million, as stated in the notice sent to the Spanish National Securities Market Commission (CNMV). The hybrid bond issued has a coupon fixed at 4.375% (with an IRR of 4.375%) and is perpetual in nature, but includes a par call option at six years.

The proceeds from this issue, which consolidates Redeia's leadership in green financing, will be used by the company to finance and/or refinance the development, construction, installation or maintenance of projects and assets that meet the eligibility criteria established in the European Green Bond (EUGB) Factsheet. Specifically, the funds obtained will facilitate the company in advancing its new strategic plan. It will allow the company to reinforce the robustness of its capital structure to continue addressing the planned investments to undertake the ecological transition through the development of the electricity transmission grid.

The issue took place in a generally adverse geopolitical context, taking advantage of a small market window to execute a transaction under favourable conditions. For this transaction, the company has received financial advice from BNP Paribas, Citi, and ING as global coordinators, alongside Bankinter, Barclays, BBVA, Caixabank, Mediobanca, and Santander as bookrunners.

Hybrid bonds are accounted for as 50% equity, according to the methodology of the main rating agencies, meaning this transaction contributes to maintaining a solid financial position. The demand registered has reflected the great interest of fixed-income investors in Redeia, which was evident in the final book where there were investor orders worth over €3,000 million, thanks to the participation of more than 200 qualified international investors, primarily European and from the UK. Furthermore, this issue received notable support from the European Investment Bank through the ‘Invest EU Fund’.

According to Emilio Cerezo, Redeia's Chief Financial Officer, the choice of this subordinated debt instrument ‘reflects the company's firm commitment to adopting the best solutions to face the historic cycle of investments we will undertake to accompany the country in its energy transformation, in which Redeia is a firm ally’.

Similarly, he considers that both the high demand received in the issue of this first European green hybrid bond and the result of the transaction ‘are a demonstration of the confidence that the market and investors place in Redeia's evolution for the coming years and reinforce the financial sector's commitment to economic development through increasingly sustainable investments’.

Leadership in green financing

Redeia has been a benchmark in the field of green financing for years. In January 2020, Redeia made its inaugural green bond issue for an amount of €700 million to finance projects eligible under this Green Framework.
The company continued to pursue this strategy in 2021 with the issue of a new green bond – for €600 million – achieving the lowest credit margin in the last decade. Once again in 2023 and 2025, the company issued green bonds for an amount of €500 million each, which has allowed it to execute record investments in the last four years. 

With this issue in EUGB format, the company takes another step forward in its commitment to sustainability, carrying out an issue under the most demanding green standards in the market.