Telefónica launched a €1.75bn green bond, which was highly popular in the market and had a total demand that was three times the offer. The company successfully completed a €1,750 million operation in two tranches: an 8-year tranche of €1,000 million and a 12-year tranche of €750 million. Both tranches were oversubscribed by institutional investors, with over 85% and 95% of international demand respectively. The strong interest allowed the company to increase the amount and tighten the spreads from the initial guidance, resulting in coupons of 3.698% and 4.055% for the 8-year and 12-year tranches respectively. The transaction will be settled on January 24th.
Following a very favourable 2023, Telefónica starts a new year of financing with this green bond. The company, which issued three green bonds last year totalling €2.6 billion, maintains a comfortable liquidity position and a leading role in sustainable financing in the global telecom sector. The company also reaffirms its ESG commitment with today’s issue, aiming to link about 40% of its total funding by 2026 to environmental and financial sustainability.
The funds raised will mainly support projects to transform and modernise fixed and mobile telecommunications networks, enhancing their energy efficiency. These projects, along with those related to Telefónica’s Renewable Energy Plan and the development of digital solutions for energy and resource conservation, are the key drivers for improving efficiency and lowering the carbon footprint. These projects fall under the eligible categories defined in Telefónica’s Sustainable Financing Framework, which was updated in July and received a favourable Second Party Opinion from Sustainalytics.
Telefónica will report annually on the environmental impact of the projects, using indicators such as energy consumption, savings and CO2 emissions avoided. These projects are part of the Group’s financing strategy, which follows its Sustainable Financing Framework, first published in 2018 and updated twice since then, in January 2021 and July 2023. The framework, which aims to meet market best practices and investor expectations, has received a positive Second Party Opinion from Sustainalytics for all its updates.