Vasakronan is a major property owner in Sweden, working hard to green their portfolio. This is their second green bond; we covered the first last November.
The bond was issued in two parts, the first SEK350 million at 2.473% interest, the second SEK650 million at a variable (floating note) rate of 67 basis points above 5 year Swedish Treasury bond rates (mid-swaps).
This is a corporate bond with proceeds earmarked for green assets.
Credit Agricole, Morgan Stanley and SEB are the bookrunners.
SRI-CONNECT are hosting a "short, sharp" webinar tomorrow, with Bridget Boulle and Sean Kidney, on the need for definitions; analysts' role in this; the opportunity to engage with issuers and arranging banks; and the transition from issuer-backed via asset-linked to asset-backed bond issuance.
Lots of activity. For a discussion of what we mean by "labelled", see our review of 2013.
| Issuer | currency |
Amount |
USD figure |
| European Investment Bank | CHF |
350,000,000 |
387,800,000 |
The African Development Bank (AfDB) last week issued its second Swedish Krona (SEK) Green Bond, for 1 billion Swedish Kronas and a five year term. Their bond last year was in floating rate format; this time it's a fixed rate bond of 1.75% (38.5 basis points above equivalent Swedish Government bonds).
Proceeds go to climate-change related project lending in Africa.
The European Investment Bank (EIB) yesterday issued a new ZAR 300 million (US$28 million), AAA, 4 year Climate Awareness Bond.
The interesting thing about this bond is that it's targeted at the broader retail community - sales are to individual customers through distributing banks and institutions, largely in Switzerland, Italy and Germany as far as we know. We often get emails asking about how individuals can buy climate and green bonds; here's a good example. We need more.
The African Development Bank this week tapped its "Green Bond Framework" to place SEK1 billion ($153m) of five year, floating rate bonds with SPP, the wholly-owned Swedish Life Insurance and Asset Management company of Storebrand.
Unibail-Rodamco, a large European commercial property company, yesterday announced that it had placed a landmark EUR750mn green bond based on a portfolio of green buildings.
The bond was 3.4 times oversubscribed with the order book reaching EUR2.5bn in under 2 hours!
While the EIB, along with the World Bank Group and the African Development Bank, has been issuing climate bonds, other development banks are not so convinced. The huge German development bank KfW, for example, sees little material benefit in green bonds; their German Government rated borrowing costs can't really get lower and they don't need to find new investors. And they're right - from a bank treasury perspective it's merely a distracting idea.
Bridget Boulle reporting
We've just heard that the European Investment Bank (EIB) is making a further EUR500 million ($690m) tap of its Climate Awareness Bond that matures in November 2019. The bond, which was first issued in July 2013, has now been tapped 5 times putting it EUR2 billion outstanding! The lead underwriters for this tap were: Credit Agricole, Citi, Morgan Stanley and RBC.
The word is that they were initially going for EUR250m but it closed at EUR500m.
