IBERDROLA Issues EUR 750 Million of 3-Year Bonds (Spain)

January 26, 2011

IBERDROLA completed a €750 million issue of 3-year bonds on the euro market. Given the current favourable market conditions for companies such as IBERDROLA, the initial amount was raised by €250 million.

This issue was nearly seven-times oversubscribed, drawing orders of €5.2 billion, and was placed among over 300 investors from 28 different countries in record time.

This success of this issue highlights market interest in IBERDROLA paper and the company’s ability to raise funds in different markets. This is reflected in the positive trend of its five-year CDS spread, which is below 150 basis points.

The spread has widened to 175 basis points with a 3.875% coupon. The lead managers were Banesto, BNP Paribas, Citi, Morgan Stanley and Mitsubishi UFJ Securities International Plc.

The company seized upon the favourable market conditions to carry out this placement which will enable it to reduce bank debt and meet future financing needs. This issue follows others carried out by IBERDROLA in the capital markets in the last two years and September’s bond exchange, which have enabled it to raise around €8 billion.

At the end of September 2010 the company boasted a comfortable liquidity cushion (€10.17 billion), which covers its financing needs until mid 2012. IBERDROLA has reduced its gearing from 47.4% at the end of September 2009 to 45.3% at present (excluding the impact of the tariff deficit).

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Source: IBERDROLA, January 26, 2011;