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Bonds & Loans: CADES smashes orderbook record as it raises €6bn from social bond

A weekly overview of ESG developments for fixed income

French public agency CADES smashed its orderbook record as it raised €6bn from a 10-year social bond, its largest ever. Orders reached €26.5bn from 265 investors when the orderbook for the 0.45% bond closed. Allocation was broadly diversified, with Asian investors taking 22.6%, followed by the UK at 18.3% and France at 17.9%. Other eurozone countries took 15.3% while Germany and the Benelux received 9.6% each. Proceeds from the deal will be allocated to finance social security in the country, with eligible categories including access to healthcare and social inclusion. 

In sovereign news, the Philippines has launched its sustainable financing framework with a second party opinion from Vigeo Eiris, which gave it the second highest rating of ‘robust’. Meanwhile, in a consultation call with the UK’s debt management office held on Monday, gilt investors and arranging banks supported the continued issuance of green gilts, suggesting that the two existing green gilts could be reopened and a third gilt with a maturity around 20 years could be issued. Some investors suggested that the UK could launch an index-linked green gilt. 

The World Bank has raised NOK3.5bn (€350m) from a new sustainable development bond. Handelsbanken Asset Management, Sbanken and Sparebanken Møre were among the investors in the 4.5-year bond, which pays three-month Nibor plus 150bp. The majority of allocation was to banks, which took 96% of the bond, with an 86% allocation to Norwegian investors and the remaining 14% to Swedish investors. 

Meanwhile, the International Finance Corporation has raised C$500m (€350m) from a 5-year 1.85% social bond, which it said would be invested in underserved communities in emerging markets, including women entrepreneurs and access to healthcare. The European Bank for Reconstruction and Development is to invest $100m into a $340m privately placed bond from Norwegian renewables firm Scatec, which will support a portfolio of six solar plants in Egypt.

Spanish telecoms firm Telefonica has added sustainability targets to its refinanced €5.5bn lending facility. Natwest acted as agent and BNP Paribas as sustainability coordinator on the deal, which was supported by 30 investors with a 30% oversubscription. The interest rate on the facility is linked to a reduction of scope 1 and 2 emissions by 70% by 2025 and an increase of women in executive positions to 37% by 2027.

US packaging firm Sonoco has raised $1.2bn from a triple-tranche green bond, its first. The firm raised $500m from a 3-year tranche paying 1.8%, £300m from a 5-year tranche paying 2.25% and $500m from a 10-year tranche paying 2.85%. Sonoco said it planned to use the proceeds to partially pay for its acquisition of recyclable metal packaging firm Ball Metalpack. 

Turkey’s Coca-Cola İçecek braved the dollar market to raise $500m from the country’s first sustainability-linked bond. The 7-year bond launched with a yield of 4.75% on a 4.5% coupon, with a 50bp step-up should the firm fail to reduce its water usage by 13% by the end of 2027.

Italian gas infrastructure firm Snam has raised €1.5bn from a dual-tranche sustainability-linked bond, its largest issue since 2013. With an orderbook reaching €4.1bn, Snam raised €850m from a 7-year tranche, paying 0.75% and €650m from a 12-year tranche, paying 1.25%. The coupon on the 7-year tranche will be increased by 25bp a year with a maximum of 75bp if the firm fails to cut its scope 1 emissions from natural gas by 55% by 2025 and total scope 1 and 2 emissions by 40% by 2027, with a similar increase on the second tranche if it fails to cut its scope 1 and 2 emissions by 50% by 2030.

Italian lender CREDEM has raised €600m from its inaugural green bond. The 6-year bond pays 1.25% and saw orders of €1bn, with 59% allocation to Italian investors and 20% to French. Deutsche Pfandbriefbank has raised €750m from its third green bond, a 3-year note which attracted €1.4bn of orders, while the UK’s Yorkshire Building Society raised £500m from a 5-year social bond, which saw orders of £1bn.

UK housing association L&Q has raised £300m from its inaugural sustainability-linked bond. The 10-year bond, which pays a coupon of 2%, was 2.5x oversubscribed at peak. The coupon is linked to three targets: a 20% cut in scope 1 and 2 emissions, the construction of 8,000 new homes of which 50% are affordable and improvement in an energy efficiency metric. If any target is missed the coupon will rise by 12.5bp with a maximum increase of 93.75bp over the life of the bond. Meanwhile, French real estate investment trust Icade has raised €500m from an 8-year green bond, which pays a coupon of 1% and was more than 3x oversubscribed.

Irish grid operator the Electricity Supply Board has raised €500m from a 12-year green bond. Orders for the bond reached €2.2bn, with 40% allocation to French investors, followed by Germany and Austria at 28%. Chilean grid operator is holding investor calls ahead of a 10-year green bond which will raise up to $390m to repay existing debt.

Retail real estate firm NEPI Rockcastle has raised €500m from an 8-year 2% green bond. Orders for the deal reached €1.5bn, with 78% allocation to asset managers. Meanwhile, Central European office real estate company CA Immo has signed a €300m revolver with Crédit Agricole, Natixis, RBI, Unicredit Bank Austria and Erste Bank. The interest rate on the facility is linked to the firm’s ESG rating. 

Caixabank has raised €1bn from its fourth social bond, which it says will fund loans to families, self-employed workers and SMEs in Spain. The bank saw €1.65bn of orders for the 6-year bond from more than 100 investors, 80% of which are classified as socially responsible. It pays 0.625%.

Swiss cement firm Holcim has raised Sfr375m (€360m) from Switzerland’s first sustainability-linked bond. The company raised Sfr275m from a 5-year bond paying 0.375% and Sfr100m from a 10-year bond paying 1%. The coupon will be increased by 37.5bp on the 5-year and 75bp on the 10-year if Holcim fails to cut its scope 1 emissions by 9.7% and 17.5% respectively. Meanwhile, Italian construction firm WeBuild is holding investors calls for a possible sustainability-linked bond which will see it pay an extra 75bp if it has failed to half its carbon intensity by 2025 against a 2017 baseline. 

Air France-KLM has signed a sustainability-linked loan with Societe Generale to finance the purchase of an Airbus A350-900 aircraft. The interest rate on the loan is linked to usage of sustainable aviation fuel and the proportion of fuel-efficient aircraft within Air France’s fleet. The size of the loan was not disclosed, but aviation site Aerocorner lists the 2018 price of the specific model as £317.4m. 

UK clothing firm Burberry has added sustainability targets to its £300m revolver, which was coordinated by Lloyds Bank. The interest rate on the loan is linked to reduced scope 3 emissions and the company’s Net Zero by 2040 goal.

In renewables news, Abu Dhabi firm Sweihan PV has raised $700m from the Emirate’s first solar green bond, a 3.625% bond maturing 2049 which saw orders of $1.6bn, while Argentina’s Pampa Energia has raised AR$3.1bn (€26m) from an 18-month green bond, which pays Badlar plus 2%. The company said that proceeds will finance the expansion of one of its wind farms.