Telefónica has issued its first senior sustainable bond to fund sustainability projects and initiatives.
The bond amounts to €1 billion ($1.06bn) and has a term of nine years. The company said the issue was oversubscribed by more than double, comprising some 150 orders and with a diversified investor base.
The telco will use the funds raised to finance investments in green and social projects aimed at improving energy efficiency through the transformation of copper networks to fiber networks and the deployment of 5G technology. It will also allocate funding to accelerate the deployment and improvement of broadband connectivity in underserved rural areas, and to stimulate entrepreneurship and employment generation.
Though this is the first senior bond, Telefónica has now made five ESG issuances in the last three years totaling €4.25 billion ($4.52bn). Since the launch of its first green bond in January 2019, the company made a green hybrid bond in 2020 and two sustainable hybrids, one in February 2021 and the other in November of the same year. In January 2022, the company refinanced its main syndicated loan of €5.5 billion ($5.85bn) under environmental criteria.
Telefónica is working toward achieving zero net emissions by 2040, with an interim deadline of 2025 in Brazil, Germany, and Spain (Scope 1+2).
Sustainability-linked financing is quickly becoming a common trend amongst data center and telco firms. The likes of Equinix, Verizon, NTT, Airtrunk, KPN, Baidu, Atos, Digital Realty, Flexential, and Nabiax have all raised new funds or converted existing debt to include interest rates tied to sustainability and ESG goals.
Aligned CFO Anubhav Raj discusses the company’s interest in sustainable financing with DCD in the latest issue of DCD magazine. Download and read it now.
A version of this story appeared on our Spanish edition.