Bonds & Loans: APICORP finances eco-friendly crude carriers

A weekly overview of ESG developments for fixed income

The Arab Petroleum Investment Corporation (APICORP) and the UAE’s National Bank of Fujairah have provided a $108m 5-year finance facility to Hartree Maritime Partners, which will allow it to purchase two “very large crude carriers” with ‘eco-scrubbers’ and highly efficient engines. APICORP CEO Ahmed Ali Attiga said that the deal, further terms of which were not disclosed, was in line with its ESG framework. Last month, APICORP raised $750m from its inaugural green bond, but confirmed to RI that the proceeds from the deal were not used to finance this transaction. Meanwhile First Abu Dhabi Bank, the UAE’s largest, has raised CHF200m (€188m) from its second Swiss Franc-denominated green bond of the year. The 5-year bond priced at 0.1475% with strong demand, the bank said. 

Cement heavyweight CEMEX has signed a $3.25bn sustainability-linked credit agreement with a syndicate of banks. The agreement, split between a $1.5bn 5-year loan and a $1.75bn revolving credit facility is the first to be made under its sustainable financing framework, which links the interest rate to CO2 emissions intensity, clean energy usage and alternative fuels rate, with a maximum step up or down of 5 basis points.  

Dutch telecoms provider KPN saw a 2bp pricing advantage on its debut sustainability-linked bond, according to one lead – raising €700m off an orderbook that peaked at €1.5bn. The coupon on the 12-year bond is linked to a 30% cut in Scope 3 emissions by 2030, with a coupon increase of 37.5bp if that target is not met. The issuer claims it is already carbon neutral in its scope 1 and 2 emissions. Elsewhere in the Netherlands, grid operator Stedin saw €2bn of orders for its €500m green bond, due 2026. 

Kenya is due to issue its first green bond before the end of the year, with JP Morgan Chase and Citigroup mandated last week as lead arrangers for the deal, which will aim to raise as much as $700m. Greece’s Finance Minister Christos Staikouras told a meeting at COP26 that the country plans to issue its first green bond in the second half of 2022, while China’s multi-tranche Eurobond offering expected to be issued today made no mention of green bonds, despite speculation that the €4bn deal could include China’s first ever green tranche. 

Car manufacturer Ford has raised $2.5bn from its inaugural green bond, the largest ever by a US non-financial corporate. The 10-year bonds, which yield 3.25%, top the $2bn raised by Walmart in September. Ford said in a regulatory filing that proceeds would be entirely allocated to clean transportation. 

The Industrial Commercial Bank of China has raised $3.2bn from a five-tranche green bond – including Macau’s largest ever. The bank raised MOP2bn (€215m) in Macau with a 0.6% bond due 2023, with a $1bn 1.625% bond due 2026, a $1.05bn 1% bond due 2026, a €500m 0.125% bond due 2024, and a £250m 1.625% bond due 2025. Meanwhile, Bank of China Group Investment has raised $600m from a 5-year green bond with a yield of 1.914%. Orders reached $1.3bn for the deal, with strong interest from bank treasuries and central banks. 

The latest blue bond transaction sees Belize secure a $364m debt restructuring in partnership with the Nature Conservancy. It will commit $23.4m to a marine conservation fund as part of the deal. Credit Suisse acted as sole structurer and arranger for the deal, which received political risk insurance from the US International Development Finance Corporation. It allows Belize to repurchase existing debt worth $526.6m, with the country committing to protect 30% of its ocean area and significantly lowering its financing costs. 

Thailand has seen its largest ever sustainability-linked bond after significant investor demand prompted chemicals producer Indorama Ventures to upsize its triple-tranche deal to B10bn (€263m). The firm had initially planned to raise B6bn, but exercised its greenshoe option to raise a further B4bn after the order book hit B17.8bn. The coupon on the 5-year 2.48%, 7-year 3% and 10.5-year 3.6% bonds is linked to a 10% GHG reduction by 2025, increased usage of recycled plastic and 25% renewables usage by 2030. The Bangkok Post reported that if Indorama fails to meet the targets it must also purchase energy attribute certificates or voluntary carbon offsets. 

HSBC UK has launched a £500m green SME fund, which will provide an interest discount on loans for activities eligible under its green framework, which has been reviewed by Sustainalytics. UK businesses with a turnover of less than £25m will be offered a 1% cashback on loans over £10,000, the first structure of its kind in the UK. In other UK banking news, Natwest has raised £600m from its second green bond. The bank saw orders of £1.3bn for the 7-year deal. 

Swedish property company Diös has updated its green bond framework to align with the EU’s green taxonomy and proposed Green Bond Standard, and has secured a ‘medium green’ rating from CICERO. Diös is currently assessing the conditions for a new green bond under the updated framework and has mandated Handelsbanken to hold investor calls today. Meanwhile, Swedish investment company Kinnevik has announced intentions to issue a sustainability-linked bond from its SEK6bn (€600m) MTN programme before the end of the year. The firm will link the coupon on the bond to its targets of a 7% year-on-year portfolio intensity reduction, having 10% of its newly invested capital in female founded or led companies and a five percentage point year-on-year increase in portfolio ESG score. 

IHS Markit has lowered the size requirements for sub-sovereign green bonds to qualify for the Bank of International Settlements’ Asia Bond Fund, in a bid to encourage growth in the fledgling market. All countries apart from South Korea have seen their thresholds cut, with Malaysia’s reduced by half and China’s by 85%.  

French IT firm Atos has raised €800m from its inaugural sustainability linked bond. The 8-year bond, which was twice oversubscribed, pays a coupon of 1% which will rise by 17.5bp if Atos fails to halve its scope 1, 2 and 3 emissions by 2050. Fellow French firm – glass producer Verallia – has raised €500m from its second sustainability-linked bond this year. The firm saw 2.5x oversubscription for the 10-year bond, which pays a coupon of 1.865%, which is linked to two targets: a decrease in scope 1 and 2 emissions by 15% by 2025 and a ten percentage point increase in the use of recycled glass by the same date. Proceeds will be used to repay existing debt.  

Multi-service provider Elis has signed a €900m sustainability-linked revolving credit facility with a syndicate of 13 unnamed banks. The 5-year deal is linked to an increase in the proportion of women in senior leadership to 42% from 34% and a 30% reduction in water usage at its European laundries by 2030.