Telefonica has closed a €1.75 billion green hybrid bond issuance, while simultaneously launching a purchase offer for three outstanding hybrid bonds, reinforcing its proactive debt management strategy and commitment to sustainable financing.
The green hybrid issue was structured in two tranches. The first tranche of €900 million carries a first call date in January 2031 and was priced with a coupon of 4.381 percent, corresponding to a yield of 4.375 percent. The second tranche, totaling €850 million, has a call date in January 2034 and was issued with a coupon of 4.881 percent and a yield of 4.875 percent.
Investor demand for the transaction was exceptionally strong, with the combined order book reaching nearly €12 billion. Each tranche attracted more than 300 orders, reflecting broad market interest. The investor base was widely diversified, with international investors accounting for more than 98 percent of the final allocation.
Telefonica significantly improved pricing conditions during the book-building process. Initial coupon guidance was set at around 5 percent for the shorter tranche and 5.50 percent for the longer tranche. Strong demand allowed the company to tighten pricing by 62.5 basis points on each tranche, resulting in the final yields of 4.375 percent and 4.875 percent, respectively.
The green hybrid issuance, together with the purchase offer, forms part of Telefónica’s strategy to actively manage its balance sheet while maintaining a diversified and resilient investor base. Closing and final settlement of the transaction are scheduled for January 19.
Proceeds from the green hybrid bonds will be primarily allocated to projects focused on the transformation and modernization of Telefonica’s fixed and mobile telecommunications networks, with a strong emphasis on improving energy efficiency.
Funds may support initiatives under Telefonica’s Renewable Energy Plan, as well as the development of digital products and services designed to reduce energy consumption and preserve natural resources, in line with the company’s Sustainable Financing Framework.
Hybrid Bond Purchase Offer
In parallel with the new issuance, Telefonica has launched a purchase offer for three outstanding hybrid bonds, which together have an aggregate nominal amount of €2.25 billion outstanding.
The offer process begins today and is set to conclude on January 19 at 5:00 p.m. Results of the purchase offer are expected to be published on January 20.
Through these actions, Telefonica continues to align its financial strategy with sustainability objectives while optimizing its capital structure amid favorable market conditions.