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.
The webinar today - Tues 18 Feb @1pm EST/6pm GMT - is hosted by "AsYouSow.org".
Three of us will be talking:
If you're interested, join at Green Bonds: Trailblazing Issuers Accelerating the Low Carbon Economy webinar.
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We've heard that EIB has just done a SEK900m tap, taking the amount of this 2019 maturing bond to SEK3bn ($466m) in total. Buyers were Swedish institutional investors. No further details yet, except that SEB was the underwriter.
(BTW, in my earlier email about the NIB EUR40m bond I mistakenly noted SEB as the underwriter - an error - I meant to say Credit Agricole CIB. This EIB SEK bond is the SEB one.)
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Anne Simpson of CalPRS, at last month's UN Investor Summit on Climate Risk, warning that catastrophic climate change will be a disaster for investors:
The Nordic Investment Bank (NIB) this week issued a 5 year, EUR40 million ($55m), floating rate note, part of their ongoing "Environmental Bond" programme. This is the fifth bond they've issued under this program, with just under $500m worth of NIB Environmental Bonds currently outstanding.
By Bridget Boulle, Climate Bonds Initiative. Prepared for Responsible-Investor.com
2013 has been a big year for green and climate bonds - it was the year that everyone started talking about them. It was the year that totals outstanding of explicitly green “labelled” bonds doubled, the issuer list diversified and investors in both the mainstream and ESG/SRI markets became interested. Here is short overview of developments.
