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Bonds & Loans: First ever green bond dedicated to nuclear power

A weekly overview of ESG developments for fixed income

Canadian investors have bought C$500m (€348m) of green bonds from Bruce Power in a private placement. The notes will be used to finance the life extension and increased output of the utility’s nuclear power stations, making it the first green bond dedicated to nuclear power. In its second-party review, CICERO awarded the deal its second highest rating (Medium Green), acknowledging concerns over radiation leakage and catastrophic incidents but saying risks were reduced by Canadian regulation. BMO Capital Markets and TD Securities acted as green structuring agents on the framework, with HSBC joining the pair as a lead agent and joint bookrunner. Canadian Real Estate Investment Trust Choice Properties has raised C$350m (€244m) from the private placement of its inaugural green bond. The 5-year bonds pay a coupon of 2.456%, with proceeds allocated to eight eligible categories including green buildings and biodiversity. 

Hong Kong has raised $3bn from a series of green bonds, including its first Euro-denominated bond. Although the orderbook was less than half the size of that its debut $6.7bn deal, the $1bn 10-year notes priced at 1.855% – 23bp over the 10-year US Treasuries – while the €1.25bn 5-year and €500m 20-year notes priced at 0.019% and 1.059% respectively. Nearly three quarters of the dollar tranche was allocated to Asian investors with the remaining notes going to Europe, while the Euro-denominated tranches saw the reverse allocation. Hong Kong’s Financial Secretary, Paul Chan Mo-po, said the city would soon issue RMB-denominated green bonds, and was following in the footsteps of the UK in developing a retail offering.  

In other sovereign news, the Philippines has said it is finalising its sustainable finance framework ahead of a debut green bond issuance, but has not given a timeline for issuance. Since 2019, Filipino corporates have raised $4.8bn from green, social and sustainability bonds. Meanwhile, investors are cautious about Saudi Arabia’s planned green bond, Bloomberg has reported. While Nordea said it would wait to see the framework before making a decision, Bank of Singapore’s Head of Fixed Income Research said: “The demand for green and other ESG bonds is so voracious that I would expect Saudi Arabia to have little trouble consummating this deal”. 

Taiwan Semiconductor Manufacturing, the world’s largest semiconductor manufacturer has agreed two sustainability-linked loans. The interest rate on a $2bn facility signed with Standard Chartered is linked to reductions in GHG and air pollutant emissions and an increase in renewables share. A €1bn loan from DBS has a rate tied to a number of green and social factors including setting up a responsible supply chain and green manufacturing. 

Shipping titan Maersk saw more than 700% demand for its debut €500m green bond, achieving its lowest ever interest rate. The 1-year bond priced with a coupon of 0.75% and will finance container vessels capable of running on carbon-neutral methanol. 

Australian telecommunications firm Singtel Optus has raised A$300m (€192m) from a sustainability-linked bond. The 2.6% bond, maturing 2028, will be subject to a step up of 0.25% if the firm fails to reduce its Scope 1 and 2 emissions by a quarter by 2025.  

French public transport body Île-de-France Mobilités has raised €500m from its third green bond of the year. Proceeds from the 15-year, 0.675% deal – two thirds of which went to French investors – will be mostly spent on clean transportation. Meanwhile, French hospitality giant Accor raised €700m from its inaugural sustainability-linked bond. The 7-year 2.375% bond was 3.5 times oversubscribed, with the coupon linked to Accor’s 25.2% scope 1 and 2 and 15% scope 3 reduction targets by 2025. 

RWE has raised €1.35bn from a dual tranche green bond to finance wind and solar projects. The firm’s CFO said that the deal, its second, saw “keen interest” from investors. The €750m 0.5% tranche is due 2028, and the €600m 1% tranche is due 2033. 

İşbank, Turkey’s largest private bank, has signed €434m and $328m sustainability-linked loans with a group of 37 banks. The interest rate is tied to decarbonisation across Scope 1, 2 and 3, and an increase in disabled-friendly ATMs across the bank’s network. 

Kenya’s largest bank plans to issue the nation’s first green bond by a commercial lender in 2022. The bank is one of only three Middle-Eastern and African lenders in the Net Zero Banking Alliance. The Kenyan government is also planning to come to market.  

Nordic IT firm Dustin has converted its SEK5bn (€494m) credit facility into a sustainability-linked loan. The agreement, made with Handelsbanken, Nordea and Swedbank, will see the interest rate change rate based on Dustin’s achievement of targets relating to carbon emissions intensity and recovered electronic devices. 

Pacific Gas and Electric Company has raised $860m from a green bond to finance electricity system ‘hardening’ and other system improvements in California. PGE said that the improvements to the system would reduce the risk and impact of wildfires in the state. 

Chilean fish farmer Salmones Camanchaca has added sustainability targets to a new $135m credit facility from DNB, Rabobank and Santander. The interest rate will be reduced by up to 5bp if the firm meets five sustainability targets, including reductions in GHG emissions and worker accidents. 

Crude oil trader Gunvor has signed a $1.455bn sustainability-linked revolving credit facility across two tranches. The facility is linked to four KPIs: reductions in scope 1 and 2 emissions, improvement in energy efficiency in its shipping fleet, investment in non-fossil projects and an assessment of the group against human rights principles. Gunvor said that the facility, which will be used for refinancing and general corporate purposes, received “strong support” from banking partners, as well as attracting new banks to the deal. 

The European Bank for Reconstruction and Development has bought €10m of Romania’s first sustainability-linked notes as part of a €48m private placement from car rental company Autonom. The 5-year bonds pay 4.11%, which will increase by 30bp should Autonom fail to cut its operational emissions by 25% by 2025.  

Swiss lender Graubündner Kantonalbank has made its green bond debut, raising CHF100m (€95m) from an 8-year bond, which pays 0.1%. Meanwhile UniCredit has acted as mandated lead arranger for a €100m sustainability-linked loan to industrial automation firm Datalogic. The interest rate on the loan is linked to achieving two types of environmental and social certifications for its production sites.