Moody's rates Iberdrola notes Baa3

Moody's Investors Service said it assigned a Baa3 long-term rating to the undated deeply subordinated reset rate guaranteed securities to be issued by Iberdrola International BV and guaranteed on a subordinated basis by Iberdrola SA.

The outlook is stable.

The size and completion of the hybrid are subject to market conditions, Moody's said.

The rating assigned to the hybrid is two notches lower than Iberdrola's senior unsecured rating of Baa1, reflecting the perpetual, deeply subordinated features of the hybrid and the company's ability to opt to defer coupons, the agency said.

Iberdrola's Baa1 rating reflects the group's scale and geographic diversification with more than half of its earnings coming from the diversified businesses in strong economic areas outside of Spain, Moody's said, along with the group's strategic emphasis on investment in regulated and contracted The ratings also consider the improved macroeconomic backdrop in the group's core domestic market, although that is tempered by political uncertainties, the agency said.

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