While we knew the bond was in the pipeline, we didn't quite expect a EUR1.4bn bond ($1.9bn) and it could have been bigger! Apparently it was two times oversubscribed.
This bond shifted the market firmly away from the AAA space and demonstrated that there is plenty of demand further down the ratings scale to A+.
The bonds are tied to the company's renewable energy business, EDF Energie Nouvelles. The bond was reviewed by french ESG company Vigeo, who worked with EDF to come up with project-level ESG criteria for EDF. This covered a broad array off issues, such as human rights, environmental impacts and supply chains. Deloitte will then provide the tracking and sign off against the developed criteria.
We're broadly happy with the credentials of this bond, primarily because we know it’s going to be used only for the Energie Nouvelles business, so it's visibly ring-fenced.
However, we were a bit worried that Vigeo’s criteria did not state which types of projects can be included but rather provided an ESG scoring framework for projects that are already in the bond. We spoke to Vigeo about the types of projects and were broadly happy with their approach; it’s not a climate standard and perhaps not scalable, but it's in the right direction. We've agreed to work together in aligning approaches.
Expect to a lot more EDF in this space.
