Telefónica Issues 1B Euro Sustainable Senior Bond
June 1, 2022
successfully issued its first senior sustainable bond, amounting to 1 billion
euro and a term of nine years. With this operation, Telefónica meets in advanced
the objective of exceeding 10 billion euros in sustainable financing over the
This transaction, with a coupon of 2.592% and maturity in May 2031, has been
very well received by institutional investors despite the recent market
instability. With a book oversubscribed by around 2.5 times, comprising some 150
orders and with a broadly diversified investor base, the conditions have been
significantly improved from the initial indications of a spread of 115 basis
points (bp), with a reduction of 22 bp to 93 bp. At the same time, the amount
has been substantially increased from the initial indications of 750 million
euro to a final volume of 1 billion euro.
Telefónica, a pioneer in the launch of ESG bonds and hybrids within the telco
sector, will use the funds raised to finance investments in green and social
projects, which may refer to new ones or to any investment made two years prior
In relation to the environmental focus, the projects covered by these funds are
aimed at improving energy efficiency through the transformation of copper
networks to fibre networks and the deployment of 5G technology. With regard to
social projects, the company seeks to allocate funding to accelerate the
deployment and improvement of broadband connectivity in undeserved rural areas
with the aim of boosting inclusive connectivity; and to stimulate
entrepreneurship and employment generation.
Telefónica will monitor the impact in each of the categories and publish the
results in an annual audited report. In the case of green projects, the company
will impact reporting which may include metrics like energy consumption per data
traffic (MWh/PB), energy saved (in MWh) or estimated emissions avoided (tCO2eq).
On social projects, the analysis of each category may include metrics such as
the population covered with broadband in underserved rural areas, the number of
entrepreneurs, start-ups or SMEs supported or financed with these funds, or the
estimated number of jobs created.
This operation brings to five the number of ESG (green and sustainable) issuance
made by Telefónica in the last three years, since the launch of the industry’s
first green bond in January 2019, followed by a green hybrid (2020) and two
sustainable hybrids, one in February 2021 and the other in November of the same
year. In addition, in January 2022, the company refinanced its main syndicated
loan of €5.5 billion under environmental criteria.
Aligned with UN Development Goals
issuance ties in with Telefónica’s sustainability goals, which are integrated
into the company’s business strategy and aligned with the United Nations
Sustainable Development Goals (SDGs). In environmental terms, and according to
SDG 7, 11, 12 and 13, Telefónica is working on the tangible goal of achieving
zero net emissions by 2040, with an interim deadline of 2025 in Brazil, Germany
and Spain (Scope 1+2). It also aims to help customers to avoid 12M tCO2 per year
by 2025 with digital solutions, and to achieve zero waste by 2030. Fibre optic
and 5G infrastructure deployments as part of the network transformation, along
with plans to extend renewable energy, are key to achieving these goals. Optical
fibre is 85% more energy efficient, and 5G is up to 90% more energy efficient
than 4G in terms of energy consumption per traffic unit.
Regarding the impact of social projects, there is clear relationship between
internet connectivity and economic development. SDG 9 highlights the value of
connectivity and ICT solutions, a value that is even more relevant when it
benefits rural areas with difficult access to internet coverage. In terms of
supporting the entrepreneurial ecosystem, SMEs represent a significant
socio-economic component in most developing countries, contributing up to 60% of
total employment and up to 40% of GDP. Telefónica contributes to SDG 8 by
supporting more than 500 start-ups and SMEs through Wayra, its open innovation
accelerator, and venture capital vehicles.