Bonds & Loans: Canada sees 2bps greenium on market debut, Philippines raises $1bn

A weekly overview of ESG developments for fixed income: SEGRO upsizes green bond after €7bn orderbook, Vonovia issues €2.5bn green, social bonds.


Canada saw a greenium of 2bps on its green bond market debut, raising a total of C$5 billion (€3.6 billion). The country saw orders of C$11 billion from 98 investors, including C$1.25 billion interest from joint lead managers, for the December 2029 note, which pays a coupon of 2.25 percent, allowing it to cut the yield from 2.5bps over a bond due in June 2029 to 0.5bps. Canada’s green bond framework includes nine areas of eligible expenditures including biodiversity, renewables and clean transport. 

The Philippines has also made its market debut, raising $1 billion from its inaugural sustainability bond, a 25-year note paying 4.2 percent – 50bps under initial price guidance – as part of a $2.25 billion triple tranche deal. The sustainability tranche received the highest investor demand of the three, leading the government to double what it was looking to raise. Finance secretary Carlos Dominguez said that investor demand “highlights the strong investor confidence in the national government’s commitment to achieving sustainable development and mitigating climate change, notably the pledge to reduce our greenhouse gas emissions by 75 percent by 2030.” 

The UK’s Debt Management Office has said it plans to raise £10 billion from green gilts in 2022/23. One transaction will be scheduled each quarter, it said, with sales focusing on reopenings of existing medium and long maturities. 

International Bank for Reconstruction and Development has raised $4 billion from a dual-tranche sustainable development bond. The IBRD received $11.5 billion in orders from 225 investors for the two tranches: a 2-year $1 billion tranche which pays 2.29 percent and a 10-year $2 billion tranche which pays 2.5 percent. Asian investors and central banks took the majority of allocation across both tranches. 

German real estate firm Vonovia has raised €2.5 billion from a triple tranche green and social deal which included its inaugural social bonds. The firm raised €850 million from a 3.85-year tranche and €800 million from a 6.25-year tranche, both social, while also raising €850 million from a 10-year green tranche, with combined orderbooks reaching €12.3 billion. Both tranches of the social bonds will be used to finance social housing as well as privately owned affordable housing in Berlin, while proceeds from the green tranche will be used to refinance sustainable projects across Germany, Austria and Sweden, Vonovia said.  

Singapore’s Housing and Development Board has raised S$1 billion (€670 million) from its inaugural green bond. The 5-year notes pay a coupon of 1.845 percent, with proceeds allocated to green buildings projects which will be eligible for the highest ratings on the country’s Green Mark certification. The board said it had identified 30 eligible projects, and planned to issue at least one green bond a year. In other Singapore news, Keppel REIT has signed an S$127 million (€84.9 million) sustainability-linked loan according to stock market filings, but did not disclose the lender or sustainability targets. 

SEGRO has raised €1.15 billion from a dual tranche green bond, which was upsized after huge investor demand. The UK warehouses group was initially looking to raise €500 million each from a 4-year and an 8-year note, but raised the shorter tranche to €650 million after orders reached €2.5 billion and €3.2 billion respectively. The final orderbook totalled €6.9 billion across both tranches, but SEGRO still saw a new issue premium of 10bps and 15bps respectively, with the 4-year tranche paying 1.25 percent and the 8-year paying 1.875 percent. 

Commodities trader Trafigura has signed its second sustainability-linked loan of the year, raising ¥84.75 billion (€637 million) from a three-year credit facility signed with 22 banks including State Bank of India, Sumitomo Mitsui and Mizuho, the latter of which acted as sustainability coordinator. The interest rate on the facility is linked to four KPIs, reductions in operational emissions, responsible metal sourcing, increased renewables generation and implementation of the voluntary principles on security and human rights. 

Taiwan’s Chunghwa Telecom has raised T$3.5 billion (€111 million) from a sustainability bond. The 5-year bonds pay a coupon of 0.69 percent, with the raise upsized from TW$3 billion following “enthusiastic” investor interest. Chunghwa said the coupon was relatively lower, which reflected “high market support” for the company. Meanwhile, Vanguard International Semiconductor Corporation is looking to raise T$1 billion (€32 million) from a green bond, paying 0.85 percent, to fund renewable energy, energy efficiency and pollution prevention projects. 

ANZ’s Taiwan branch has signed a $50 million sustainability-linked loan with bulk shipper U-Ming Marine Transport, its second SLL in the past two months, with proceeds due to be used to fund the firm’s fleet renewal plan. The targets attached to the deal were not disclosed, but U-Ming’s previous loan was linked to emissions intensity and proportion of its fleet with an emissions certification. 

German industrial equipment manufacturer Trumpf has extended its €500 million syndicated credit line by one year, and integrated sustainability targets into the agreement. The deal, signed with a syndicate of seven banks including Landesbank Baden-Württemberg, BNP Paribas, HSBC and Deutsche Bank, is linked to employee satisfaction, accident rate and scope 1 and 2 emissions.  

Mitsubishi Heavy Industries has appointed MUFJ and Morgan Stanley as lead managers for a planned transition bond in the first half of this year. The Japanese firm, which has committed to achieve carbon neutrality by 2040, did not reveal the amount it was expecting to raise, but said it expected to spend the proceeds across six areas including carbon capture, hydrogen gas turbines and blue or turquoise hydrogen production. 

The Inter-American Development Bank has privately placed a A$60 million (€40 million) sustainable development bond with Asahi Life. JP Morgan arranged the 10-year bond, which pays a coupon of 2.8 percent. 

Finnish social and healthcare services firm Pihlajalinna has signed a €200 million sustainability-linked facility with Danske Bank, OP Bank and Swedbank. The facility, comprising a €130 million term loan and €70 million revolver, is linked to patient satisfaction, employee engagement and access to treatment. 

Indian pharma firm Glenmark has signed a $228 million sustainability-linked loan with a consortium of banks including Bank of America, Fifth Third Bank and MUFG. The interest rate will be reduced by 2.5bps if Glenmark meets emissions reduction and water consumption targets. 

Kenya Commercial Bank is looking to issue a green bond on local capital markets, becoming the second Kenyan issuer to enter the sustainable debt market, NTV Kenya has reported. The bank will be looking to raise at least Ksh11.4 billion (€90.5 million), but is still exploring its options, the bank’s CFO Lawrence Kimathi, said. Meanwhile, FirstRand Namibia has raised N$350 million (€21.3 million) from an auctioned green bond according to reports in local newspaper the Namibian, becoming the second lender in the country to do so. 

Select Energy Services, a US-based service provider for the unconventional oil and gas industry, has transitioned its $270 million asset-backed loan into a sustainability-linked loan. The interest rate on the loan, signed with a group of seven banks including Wells Fargo, Bank of America and RBC, will rise or fall based on the firm’s volume of recycled water used and safety performance against industry peers.