Telefonica issues €750 mn 6-year green hybrid bond

Telefonica announced issue of a €750 million 6-year green hybrid bond that will be used for investing in improving efficiecy of networks and green projects.
Telefonica’s 5G network in SpainTelefonica also presented an offer to purchase two hybrids with redemption dates in March and September 2023. The offer will end on 21th of November and the closing date of the operation will be on the 24th.

Telefonica has received a book of more than 300 orders for the hybrid bond issue – exceeding the amount finally issued by more than 6 times – from institutional investors, with international investors accounting for more than 90 percent.

Telefonica has managed to improve the conditions significantly, with a coupon reduction of 62.5 basis points and a final cost of 7.125 percent from the initial indications of 7.75 percent. The closing and final settlement will be on the 23rd of November.

Both operations, the green hybrid issue and the buyback offer, are aimed at continuing to proactively manage the company’s hybrid capital base. At the end of September, the average maturity of the debt was 13 years.

Telefonica will allocate the funds to investments in green projects consisting mainly on the shutdown of obsolete equipment and the deployment and improvement of network infrastructure. These will be projects that seek to achieve greater energy efficiency thanks to the transformation of telecommunications networks through fibre and 5G technology, and renewable energy generation plans.