Bonds and Loans: Hungary, Andorra and Malaysia issue green bonds

A weekly overview of ESG developments for fixed income

Bank of China has raised $1.8bn from four multi-currency green bond issues. The bank’s Frankfurt branch raised Rmb1.35bn (€174m) for a two-year issue which closed with a coupon of 2.85%, while the Singapore branch raised $500m from a three-year issue with a coupon of 0.8% on an orderbook of $1.4bn, with 95% of issuance allocated to Asian investors. The Luxembourg branch sold a $500m five-year tranche and a €500m two-year tranche, with a coupon of 1.4% and 0% respectively. Proceeds from all the bonds will be used to finance or refinance green projects.

S&P Global has signed a $1.5bn revolving credit facility, which it claims is the first such facility in the US media and information services sector. The facility has a pricing adjustment linked to the company’s commitment to reduce its scope 1 and 2 emissions and scope 3 emissions from business travel by 25% by 2026 against a 2019 baseline.

Hungary has issued HUF 30bn (€82m)in green bonds. The issuance, one of three quarterly green bond issuances planned this year, was increased by HUF 10bn after the orderbook reached HUF 141bn. The 30-year bonds, which have an average yield of 3.69%, are the among the longest term sovereign green bonds available, matched by issuances in Hong Kong and Poland. Eligible expenditures include clean transportation, waste and water management and renewable energy.

Malaysia has issued an $800m 10-year sustainability Sukuk. The orderbook was 6.4 times oversubscribed for the Sharia-compatible debt, which was issued alongside $500m in 30-year non-sustainable debt. The high level of demand led the government to increase total issuance to $1.3bn from a planned $1bn. Proceeds from the Sukuk, which has a coupon of 2.07%, will be used on eligible green and social projects aligned with the SDGs.

President Biden’s commitment to cut 50% of US emissions by 2030 significantly increases the chance of a US green bond issuance, according to Johann Ple, senior portfolio manager at AXA Investment Managers. “This effort is due to be done in partnership with the private sector and should, in particular, reinforce green bond issuance from US corporates at a time when US investors are also looking at more ESG integration,” he said. “Moreover, given the considerable amount of investment that will be required to hit such a target, the chances of a US green bond being offered to investors in the coming years are increasing greatly.” 

European real estate firm Atrium has priced a €350m green ‘hybrid’ bond. The five-year notes have a coupon of 3.625% and had an orderbook of €1.2bn. Proceeds will be spent on projects eligible under Atrium’s green financing framework, including on green buildings, energy efficiency and renewables.

Swedish agricultural cooperative Lantmännen has issued an SEK 1bn (€98.5m) green bond. The order book for the 5-year issuance reached SEK 3.3bn, and the issue was divided into SEK 150m with a fixed coupon of 1.115% and SEK 850m paying 0.78% over the three-month Stibor. Proceeds will be allocated to finance or refinance eligible projects in five green categories including renewables, sustainable land use and pollution prevention.

The Principality of Andorra has issued its inaugural green bonds, raising €500m. An orderbook of €2.3bn saw the bonds price with a coupon of 1.15%. The principality has around €680m of eligible expenditure, including on access to healthcare, renewables and digital inclusion.
Vigeo Eiris issued a second-party opinion on Andorra’s green bond framework ahead of a planned issuance. The framework, which covers green, social and sustainability bond expenditures, is aligned with both the Green Bond and Social Bond Principles.

Swedish property company Nyfosa has issued an SEK 1bn (€98.5m) green bond. The three-year bonds have a floating interest rate of three-month Stibor plus 3%. It is expected that the majority of proceeds will be allocated to green buildings projects, with five other categories including renewables, clean transportation and energy efficiency also eligible.

Singapore telecommunications firm Singtel Group has signed an S$750m (€468m) sustainability-linked revolving credit facility, the largest in Singapore to date. The three-year agreement features an interest rate reduction linked to ESG targets in areas including climate risk and carbon management.

Aeroporti di Roma has issued a €500m sustainability-linked bond. The 10-year bond was five times oversubscribed and was issued with a coupon of 1.75%. Aeroporti di Roma has committed to reducing its Scope 1 and 2 emissions by 53% and its Scope 3 emissions per passenger by 7% by 2027 against a 2019 baseline, as well as maintaining a level 4+ on its Airport Carbon Certification. The coupon will be increased by 0.125%, 0.19% or 0.25% if it fails to meet one, two or three of these targets respectively.

South Korea’s Incheon International Airport has issued its debut $300m green bond. The order book for the five-year bonds was ten times oversubscribed, and closed with a coupon of 1.25%. Expenditure under the state-owned airport’s green bond framework aims to minimise the environmental impact of its operations while ensuring vulnerable people benefit from economic opportunities created by the airport. 

Saudi Arabia's Red Sea Development Company has signed a 15-year, Sr14.12bn (€3.14bn), ‘green loan’, which will be used to finance new hotels as part of a large tourism project in the region. The company claims the deal is the first Riyal-denominated credit facility to receive Green Financing accreditation.

Clean energy company GoldenPeaks Capital has raised €20m from its inaugural green bond launch on the Luxembourg Stock Exchange. Proceeds from the two-year bond, which has a 7% coupon, will be used to expand its renewable energy portfolio in Poland.