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Bonds & Loans: Dutch grid operator Tennet issues largest ever corporate green bond

A weekly overview of ESG developments for fixed income: UK kicks off 2022 green gilt programme, Hong Kong smashes target raise for retail green bond.

Dutch grid operator TenneT has issued the largest ever corporate green bond, raising €3.85 billion from a four-tranche deal. Orders reached €8 billion for the deal, with TenneT claiming “several triple-digit orders” from a diversified investor base. The bond is split into a €1.25 billion 4.5-year tranche, a €1 billion 7.5-year tranche, a €750 million 11-year tranche and a €850 million 20-year tranche. The sale takes TenneT into the top three corporate green bond issuers by volume.

The UK has kicked off its 2022 green gilt programme with a £2.25 billion ($2.78 billion; €2.64 billion) auction. The 11-year gilt, which pays a coupon of 0.875 percent, saw bids of £5.34 billion, with accepted bids ranging from yields of 1.945 percent to 1.967 percent.

In other sovereign news, Austria has mandated JPMorgan and UniCredit to arrange investor calls for 19 May for an inaugural green bond.

Hong Kong saw just under HK$33 billion ($4.2 billion; €3.98 billion) in orders for its retail green bonds in the 10 days they were on sale, the South China Morning Post has reported. The Hong Kong government upsized the amount it was looking to raise from the three-year notes to HK$20 billion after 493,000 people took part in the deal, with allotments due to be announced on 16 May before the notes are listed on the stock exchange. The bonds pay a minimum coupon of 2.5 percent.

Agrichemical firm Syngenta has signed a $4.5 billion sustainability-linked loan with a syndicate of banks including Bank of China, China Construction Bank and Crédit Agricole, the largest deal of its type in the APAC loan market. Further terms of the deal were not disclosed, but the firm said the initial transaction, which was later upsized, was oversubscribed “several times”.

Car rental group Europcar has pulled its proposed sustainability-linked bond from the market four days after launch. The firm had been looking to raise between €150 million and €200 million from a four-year note linked to the share of green vehicles and emissions from its fleet, but its CFO said that it had decided to pull the deal after markets “weakened substantially” and other issuers priced deals wide of their targets.

La Banque Postale has raised €750 million from its latest visit to the green bond market, from an eight-year note that was four times oversubscribed.

The International Finance Corporation has announced plans to invest $50 million in a blue bond issued by Thai bank TMBThanachart and $100 million in a green bond from the same borrower. Proceeds from the green bond will be used to finance customer purchases of electric vehicles.

ESG-labelled debt issuance in Europe in Q1 was down 32.4 percent year on year, although issuance levels were buoyed by a 4.4x increase in sustainability-linked and transition bond issuance, according to AFME’s latest sustainable finance quarterly overview. Social bonds have been particularly badly hit, with issuance levels down 74 percent, partly due to the lack of jumbo deals from the EU and other sovereigns. There has been a slight widening in greeniums so far in 2022, although they continue to hover around 1 basis point to 2 basis points.

American Express has raised $1 billion from its first sustainability bond, with eligible expenditures including the procurement of recycled material for its credit cards and campaigns to drive consumer spending at SMEs.

Communications infrastructure firm Zayo Group has signed a $750 million sustainability-linked loan, linked to its progress against “science-based” Scope 1 and 2 targets and an undisclosed DE&I target.

Thai conglomerate BTS Group has raised THB11 billion ($319 million; €302 million) from an inaugural four-tranche sustainability-linked bond. The firm was initially looking to raise THB8 billion, but upsized the deal after seeing 1.7x oversubscription. The issue comprised a THB700 million three-year tranche, a THB2.8 billion five-year tranche, a THB3.8 billion seven-year tranche and a THB 3.7 billion 10-year tranche. The coupons are linked to total electricity consumption and renewables usage in BTS Group’s green line metro network in Bangkok.

Finnish circular economy firm Lassila & Tikanoja is looking to raise €75 million to €80 million from an inaugural sustainability-linked bond. The coupons on the notes will be linked to reduced Scope 1 and 2 emissions and reduced fuel consumption by transportation contractors.

Nigeria’s Access Bank has raised $50 million from its second green bond, which was privately placed with unnamed investors. The five-year note has a put option commencing 2024 and pays a coupon of 5.5 percent, rising to 7.25 percent for the duration of the put. The bank said the structure had allowed it to achieve “attractive pricing”.

Financial firm Bayport Management, which has operations across a number of Latin American and African countries, has raised $300 million from a $250 million senior social bond and a $50 million subordinated social bond, both due 2025. Bayport said that “one of the leading Nordic development finance institutions” had invested $10 million in the subordinated bond, which pays a coupon of 15 percent. The senior notes carry a coupon of 13 percent. Bayport has also repurchased around $180 million of outstanding social debt.

Fashion brand Guess has signed a €250 million sustainability-linked revolving credit facility tied to three targets: reduced GHG emissions, increased use of sustainably sourced materials, and “increasing the penetration” of its sustainable product line.