Telefónica has successfully launched a 10-year EUR 850 million green bond. The operation has been positively received by institutional investors, over 90% international, with nearly 200 orders and a book of €2,500 million, which has prompted the company to issue the final €850 million, above the €750 million initially planned.
In addition, the conditions have been significantly improved, from the initial indications, with a spread of 135-140 basis points, to the final spread of 110 basis points. The final coupon has been set at 4.183%.
This is the third green bond issued this year, following the placement of two hybrid bonds in January and August for EUR 1,000 million and EUR 750 million, respectively. Telefónica reinforces its position as a leading issuer of sustainable financing in the global telco sector and continues with a financing strategy that allows the company to maintain a comfortable liquidity position of more than 20.7 billion euros at the end of September. In addition, the company has covered its maturities for the next three years, with an average maturity of 12.3 years and more than 80% at fixed rates.
The issuance also ties in with the company’s renewed commitment to have around 40% of total financing activity linked to ESG criteria, furthering its efforts to align environmental and financial sustainability. This new target, announced during the Capital Markets Day on 8th November, exceeds the previously established target of around 30-35%.
In line with the eligible categories defined in Telefónica’s Sustainable Financing Framework, last updated in July and externally endorsed with a favourable Second Party Opinion from Sustainalytics, the funds obtained will be allocated mainly to projects for the transformation and modernisation of telecommunications networks, both fixed and mobile, with the aim of improving their energy efficiency. The funds may also be allocated to projects related to the implementation of Telefónica’s Renewable Energy Plan, or the development of digital products and services aimed at saving energy and natural resources, as set out in the Framework. These projects are the main levers for improving efficiency and reducing the carbon footprint.
Once the projects have been identified and awarded, Telefónica will report on an annual basis on their environmental impact through indicators such as energy consumption per petabyte of data traffic, energy savings or CO2 emissions avoided.