BBVA has been the global coordinator and sustainable co-agent of Iberdrola's new €2.5 billion multi-currency syndicated loan. This operation, which was linked to two sustainable indicators, constitutes an industry milestone as it´s referenced to Risk Free Rates (RFR), which replace LIBOR and which will serve as a model for future financing in Spain. It's also a unique transaction since Iberdrola has committed to donating part of its adjusted margin to sustainable projects.
Iberdrola has formalized one of the largest transaction in the sustainable financing market, amounting to €2.5 billion, to a bank syndicate led by BBVA, which acted as the global coordinator and sustainable co-agent of this new multi-currency syndicated loan.
In addition to the amount, this transaction becomes a market reference for two other reasons. The first of these is that the financing is referenced to Risk-Free Rates (RFR) instead of LIBOR, indices that will serve as a model for future financing. The IBOR Transition project is one of the biggest challenges in the financial industry today. It consists in replacing the LIBOR index with other more robust and transparent ones (RFR). This operation´s signing represents a milestone and the culmination of efforts focused on adapting BBVA's systems and processes for the use of these new indices.
As to the transaction's sustainable aspect, it also includes a very relevant milestone: Iberdrola has committed to donating part of its adjusted margin to projects linked to the same sustainability indicators. In this sustainable transaction, the margin has been linked to the evolution of reducing company's CO2 emissions and to gender equality, such as improving the percentage of women in managerial positions.
Enrique Jiménez-Herrera, Global Head of Investment Banking & Finance at BBVA points out: “With this operation, Iberdrola proves once again that it is at the forefront of innovation in the sustainable financing field and its firm commitment to decarbonisation and gender equality. At BBVA we are proud to continue supporting Iberdrola and to collaborate closely with its teams in the framework of benchmark operations like this one.”
Iberdrola and BBVA share a firm commitment to sustainability and have collaborated in other benchmark operations in the past. In March 2019, Iberdrola formalized the first financing operation linked to SDG 7 of the United Nations´ 2030 Agenda —affordable and clean energy— for €1.5 billion. BBVA acted as the coordinating bank and sustainable co-agent. Previously, in 2017, BBVA and the energy company achieved an industry milestone by formalizing the first green loan for an energy utility on a global scale.