Île-de-France issues EUR600m( $830m), 12yr, AA+ Green Muni. They had so many orders in one hour they upped it from 350m to 600m!

Île-de-France is the regional government that Paris sits within. Yesterday they issued their second green muni bond, which they are calling a Green & Sustainability Bond, to finance an eclectic mix of green investments. The first green bond they did was for EUR350 million; this one is EUR600 million, again for 12 years. Rating is AA/AA+ (stable/stable, S&P/Fitch).


Interest rate was expected to be 20 basis points above French Treasury bonds, but was finalised at 18 basis points above. For those wondering what that means, it translates into EUR120,000 less interest paid out each year than expected.

They went to market looking for EUR350 million. After one hour they closed with EUR750 million of orders. They ended up issuing EUR600 million. I guess we can take that as another market signal.



Buyers were "high quality". 40 orders have been accepted. The most recent Ile de France bond was largely placed with French investors; this green bond has slightly broader appeal, with buyers down to 76% French this time, 12% German and Austrian, 9% Dutch, and even a US fund manager, a first for Île-de-France. 84% were classed as "SRI Investors".

Third party review (called a "Second Opinion" in this case) was done by Vigeo. Thank you Île-de-France for showing others what good practice requires!

Proceeds of the bond will be used for a broad array of investments, including:

  • Construction and renovation of buildings, including high schools, with an "eco-construction" objective.
  • Public transport with a "sustainable mobility objective", including a tramway extension and dedicated bicycle lanes.
  • Renewable energy projects, such as geothermal installations and "extension of heating networks".
  • Purchase of green space and creation of "ecological corridors".
  • Protection of water resources.
  • Energy efficient buildings for accommodation for vulnerable people and the elderly, and for social housing.
  • Support to small and medium-sized companies integrating corporate social responsibility initiatives.

The extent of detail Île-de-France is providing is commendable (click here for their PDF).


Of course there's still room for improvement: for example, specifying the level of building efficiency that will be achieved (which I imagine will be high), or a better explanation of the "support" for small companies, which sounds worthy but it's hard to tell what it actually means. That sort of issue may become easier to address as standards develop.

Île-de-France say they will report on the projects financed each year, until the notional amount of the issue is invested.

Bookrunners were Crédit Agricole CIB, HSBC France and Natixis.