Bonds & Loans: Eila Kreivi steps down from EIB

A weekly overview of ESG developments for fixed income

Green bond veteran Eila Kreivi announced this week that she will be stepping down as Head of Capital Markets at the European Investment Bank. She has held the role for a decade – during which time the EIB became the world’s largest issuer of green bonds – and also chaired the Green Bond Principles between 2015 and 2018. She wrote on social media that she would be staying on part-time as Chief Sustainable Finance Advisor at the bank and would continue to represent it on the EU Platform for Sustainable Finance. 

In sovereign news, the Swiss Federal Council has today confirmed the finance ministry will prepare a green bond framework by the end of 2022.  Peru raised €1bn from its first ever social bond, which was twice oversubscribed, while Hong Kong has reportedly mandated Credit Agricole, HSBC, Citigroup and JP Morgan for a potential dollar and Euro-denominated green bond. Austria and New Zealand have confirmed that they plan to enter the green bond market next year, too, and Sri Lanka’s finance minister has reportedly said it will issue green bonds for foreign investors. 

Construction giant Holcim has taken out a €3bn sustainability-linked revolving credit facility with a group of 24 banks. The interest rate on the 5-year deal is linked to reductions in the firm’s carbon intensity and workplace incidents that cause lost time. Meanwhile, Spanish cement company Cementos Molins has upped its sustainability-linked financing to €300m. The new deal was signed with a syndicate of lenders including HSBC, Caixabank, Santander and BBVA. The interest rate is linked to CO2 emissions reductions. 

Sun Hung Kai Properties, Hong Kong’s largest home builder, has signed a HK$8.65bn sustainability-linked loan with a group of lenders including DBS, HBSC and MUFG. The loan was almost triple its planned size of HK$3bn after “overwhelming” demand from banks. The interest rate is linked to three targets: reduction in electricity consumption intensity, improvements in S&P Global ESG scores and remaining a member of the Hang Seng Corporate Sustainability Index. 

Dutch public sector agency BNG Bank has raised €1.5bn from an SDG bond. The 15-year bond pays a coupon of 0.25% and will be used to fund loans to social housing associations. Orders for the bond reached €1.8bn with €225m interest from joint lead managers, and demand from “a significant number of high-quality SRI investors”. Germany, Austria, Switzerland and Benelux investors took the lion’s share of the notes, with almost half going to fund managers. 

Filipino healthcare firm Ayala has privately placed a $100m 10-year social bond with the International Finance Corporation to help it expand access to affordable and quality healthcare. 

The US subsidiary of food giant JBS has raised $1bn from a 10.5-year sustainability-linked bond with a 3% coupon. With an orderbook of $3.5bn, the firm said it had achieved its lowest ever borrowing cost. JBS said that the bond was “aligned” with its commitment to reduce operational emissions by 30% by 2030. 

AXA Investment Management Alts has raised €800m from a green bond for its European logistics fund. The deal consisted of a 5-year €500m tranche and an 8-year €300m tranche, which pay coupons of 0.375% and 0.875% respectively, and was roughly four times oversubscribed, with orders from 136 investors. 

The Sequoia Economic Infrastructure Income Fund has refinanced its revolving credit facility, raising £325m from a new sustainability-linked facility with RBS, ING, Macquarie and Raiffeisen Bank. The facility pays SONIA plus 200bp, with a margin premium or discount linked to the ESG score of the fund’s investment portfolio. 

Standard Chartered has executed a $250m green repo with the Saudi National Bank. The transaction is the first such MENA deal, Standard Chartered said, with the proceeds from the deal allocated to financing renewable energy projects in Saudi Arabia and the Gulf region. 

The World Bank has raised $2bn from a new 7-year sustainable development bond. The deal attracted orders from 35 investors totalling more than $2.2bn and pays a coupon of SOFR plus 29bp. Almost 80% of allocation was to banks and corporates, with 61% allocation to the Americas and 30% to EMEA. 

German chemicals firm Henkel has raised €720m from its inaugural sustainability-linked bond. The bond was issued in two tranches, raising €500m from an 11-year 0.5% tranche and $250m from a 5-year 1.8% tranche. The coupon on the dollar bond is linked to emissions reductions and an increase in recycled plastic usage, while the Euro bond uses the plastics KPI but also includes a scope 3 and emissions intensity reduction target. 

Seafood processor Thai Union has raised B6bn (€161m) from a dual-tranche sustainability-linked bond. The orderbook for the deal, Thai Union’s second, reached B10bn, with the 5-year B4.5bn tranche pricing at 2.27% and the 10-year B1.5bn tranche pricing at 3.36%. The interest rate on the deal is linked to scope 1 and 2 emissions reductions, remaining in the Dow Jones Sustainability Index’s Emerging Markets and Food Products Industry indices, and third-party monitoring of its tuna fishing suppliers.  

Japan’s Nippon Telegraph and Telephone is holding investor calls this week for a proposed Euro-denominated green bond. Nine banks including BNP Paribas and Nomura have been mandated for the deal, which will see a 4-year and 7-year tranche.