Press Release

Telefónica reopens the corporate market for hybrids in euros with a green issue amounting to 750 million

Bnamericas Published: Monday, November 14, 2022

This is a machine translation of Telefónica's press release

Madrid, November 14, 2022. Telefónica has reopened the European market for corporate hybrids, closed since mid-September, with the successful issuance of a green hybrid bond for an amount of 750 million euros at 6 years. Simultaneously, the company has submitted a repurchase offer for two hybrids with a redemption date in March and September 2023, an offer that, according to the schedule, will end on November 21. The closing date of the operation will take place on the 24th.

With regard to the issuance of the hybrid bond, the operation has been very well received in the market by institutional investors, with a book made up of more than 300 orders -exceeding the amount finally issued by more than 6 times- and a widely diversified investor base, with a participation by international investors of more than 90%. Thanks to this good response, the company has managed to significantly improve conditions, with a coupon reduction of 62.5 basis points and a final cost of 7,125% from the initial indications, which reached 7.75%. . The closing and final disbursement will be on November 23.

Both operations, both the issuance of the green hybrid and the repurchase offer, are intended to continue proactively managing the company's hybrid capital base. At the end of September, the average life of the debt stood at 13 years.

Energy efficiency and renewable energy generation

The funds obtained will be used for investments in green projects consisting, fundamentally, of turning off obsolete equipment and deploying and improving the network infrastructure. They will be projects that seek to achieve greater energy efficiency thanks to the transformation of telecommunications networks through fiber and 5G technology, on the one hand, and renewable energy generation plans, on the other.

Once the projects have been identified and awarded, and in accordance with the current Sustainable Financing Framework , Telefónica will report its impact on energy consumption per petabyte of data traffic, on the energy savings it represents and on the estimate of CO² emissions. avoided.

Global leadership in sustainable finance

Today's issuance is linked to Telefónica's objective that 25% of its financing until 2024 respond to sustainability criteria. It is also linked, in a more generic way, with the company's sustainability objectives, which are in turn integrated into its business strategy and aligned with the United Nations Development Goals (SDGs). In environmental terms, and in line with SDGs 7, 11, 12 and 13, Telefónica works to achieve zero net emissions in 2040 throughout its value chain, with the intermediate objective of neutralizing emissions reaching 1+2 in 2025 in its main markets.

It also fits in with the company's goal of helping its customers avoid issuing

of more than 50 million tons of CO2 emissions between 2020 and 2025 thanks to digital solutions and achieving zero waste by 2030. Precisely the deployments of fiber optics and 5G infrastructure as part of the transformation of networks, along with plans to extend renewable energy, are decisive in achieving these objectives. Optical fiber happens to be 85% more efficient in terms of energy than copper; and 5G consumes, per unit of traffic, up to 90% less than 4G.

Telefónica is a pioneer in the sustainable financing segment. In 2019 the company launched the first green bond in the industry, in 2020 it issued the first green hybrid bond, and in 2021 it placed the first sustainable hybrid bond in the sector.

With today's issuance, Telefónica is at the forefront of the global telecommunications sector as a leader in sustainable financing in public markets. Including this operation, the sustainable financing activity of the Telefónica group exceeds 15,000 million euros since January 2019, including sustainable financing lines.

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