Telefónica successfully issues a green hybrid for €750M

From Telefónica

This is an automated translation of the press release issued in Spanish

Telefónica has issued today a green hybrid for an amount of 750 million euros and with a redemption date of 8 years. The operation has been very well received by institutional investors, with a demand of up to 3,000 million euros, four times the amount finally issued. The investor base, highly diversified, has been made up mainly of international investors, more than 95% of the total. Thus, the company has managed to significantly improve the conditions until setting the final cost at 6.75%, from an initial coupon of 7.125%, which represents a reduction of nearly 40 basis points.

The closing and final disbursement of the operation will take place on September 7.

Telefónica has also launched today a repurchase offer for the hybrid with a redemption date of March 2024, which will remain open until September 5. The closing of the operation is scheduled for the 8th.

Both operations respond to the strategy of proactively managing the company's hybrid capital base, reinforcing its position as the leading issuer of ESG financing in the telco sector in the world. In addition, the green hybrid allows progress in the objective that 30-35% of the financing activity by 2024 responds to sustainable criteria. At the end of June, Telefónica had covered the maturities of the next three years, with an average life of the debt of 12.4 years and 80% at fixed rates. It also has a comfortable liquidity position of more than 20,000 million euros.

Commitment to investment in green projects

Today's issue is also linked to the company's sustainability objectives, integrated into its business strategy and aligned with the United Nations Development Goals (SDGs). Telefónica is committed to the deployment of sustainable, resilient and quality infrastructures and services, the socioeconomic engine of the regions in which it operates.

The funds obtained will be allocated to investments in green projects, in accordance with the categories defined in Telefónica's Sustainable Financing Framework , last updated in July 2023, and externally validated with a second favorable independent opinion from Sustainalytics. These projects focus mainly on the transformation and modernization of fixed and mobile telecommunications networks, with the aim of improving their energy efficiency. The funds may also be assigned to renewable energy generation projects, and the development of digital products and services aimed at saving both energy and natural resources. All of them constitute the main levers to improve efficiency and reduce the carbon footprint.

Once the projects have been identified and awarded, which will necessarily refer to new or existing investments, carried out up to three years before the issuance, Telefónica will report its environmental impact annually through indicators such as energy consumption per petabyte of data traffic, energy savings or CO ₂ emissions avoided.