Netherlands State-owned bank ABN AMRO has just closed a EUR500m ($556m) green property bond deal – the first euro zone green bond to be certified under the Climate Bonds Standard and now the largest Certified Climate Bond. Fantastic! Great to see the Dutch jumping on the certification bandwagon and setting a great example for the EU region!
After a blisteringly successful road show ABN AMRO were so confident of demand for their first green bond that they decided to upsize the deal from EUR350m to EUR500m. How right they were with orders nearly reaching the EUR 1bn mark!
Investors included 60% dedicated green investors and another 10% who prefer SRI investments but do not have yet special funds, analysts or requirements. Benelux investors took 31%, followed by Germany/Austria/Switzerland (27%), France (26%), UK & Ireland (11%), Nordics (3%) and others (3%). The biggest part of the deal went to Asset Managers (39%) and Banks (28%), while Pension Funds and Insurance companies both took 13%, followed by SSA's with 7%.
The bond sold well despite tough market conditions (some bankers suggested it wasn’t the best market to be doing a trade with Italy on holiday and equities falling amid crisis talks over Greece). The 5-year bond has a fixed 0.75% annual coupon. It is rated A2/A/A by Moody’s, S&P and Fitch respectively. ABN AMRO, Bank of America Merrill Lynch and Credit Agricole were the lead underwriters for the deal.
Oekom research AG carried out the verification of the green credentials against the Climate Bonds Standard. Proceeds of the green bond will finance and refinance mortgage loans for new residential buildings, and provide green loans for financing solar panels installed on residential buildings as well as commercial real estate loans for the construction and financing of energy efficient buildings.
To remind you, the Climate Bonds Standard is a Fair Trade-like labelling scheme for bonds designed to make it easy for investors to identify low carbon and climate-resilient investments. Having a bond certified under the Standard means that a Climate Bonds approved verifier – in this case Oekom Research AG - certifies that the use of proceeds of the bond complies with a set list of criteria for low carbon buildings, developed by scientists and industry experts.
This is the second Certified Climate Bond in a week, following ANZ’s green property and renewables bond, issued last week. With the low carbon property standard available we expect to see more certified deals.
Our blogs are written by a team: Sean Kidney, Tess Olsen-Rong, Beate Sonerud, Kazutaka Kuroda, Rozalia Walencik, Justine Leigh-Bell and Katie House.