Spanish telecom company, Telefónica, has completed a €1.75 billion ($1.91 billion) green hybrid bond issuance and launched a purchase offer for three outstanding hybrid instruments, as part of its ongoing debt management strategy.
The issuance was structured in two tranches. The first tranche, totalling €900 million ($981 million), carries a first call date in January 2031 and was priced with a coupon of 4.381%, corresponding to a yield of 4.375%. The second tranche, of €850 million ($927 million), has a call date in January 2034 and a coupon of 4.881%, with a yield of 4.875%.
According to the company, total investor demand reached around €12 billion ($13.1 billion), with more than 300 orders recorded for each tranche. International investors accounted for over 98% of the final allocation.
Pricing was tightened from initial guidance of around 5.0% for the shorter tranche and 5.5% for the longer tranche, resulting in a reduction of 62.5 basis points on each tranche from initial indications.
Telefónica said the green hybrid issuance, alongside the concurrent purchase offer, is intended to support the active management of its debt profile while maintaining a diversified investor base. Settlement of the issuance is scheduled for 19 January.
Proceeds from the green hybrid bonds will be allocated primarily to projects related to the transformation and modernisation of fixed and mobile telecommunications networks, with a focus on improving energy efficiency. Funds may also be used for initiatives under Telefónica’s Renewable Energy Plan or for the development of digital products and services aimed at reducing energy and natural resource consumption, in line with the company’s Sustainable Financing Framework.
Separately, Telefónica has launched a purchase offer for three outstanding hybrid bonds, which together have an aggregate nominal value of €2.25 billion ($2.45 billion). The offer opens today and is set to close on 19 January at 5:00 pm, with results expected to be announced on 20 January.
