EIB issues another €600m ‘Climate Awareness Bond,’ taking total issuance to €10bn

The European Investment Bank (EIB), which pioneered green bonds – or as it calls them “Climate Awareness Bonds (CAB)” – has issued more of the debt, raising €600m in the process and lifting its total CAB volume to €10bn.
EIB’s latest triple ‘A’-rated, eight-year CAB pays a coupon, or interest rate, of 0.5% annually and is denominated in euros. The banks that underwrote the issue include Bank of America, Barclays, BNP Paribas, Crédit Agricole and HSBC. Like two other CABs that are denominated in euros and still outstanding, the bond’s green credentials were assured by Oekom, the Munich-based ESG research firm. Oekom rates the bond a ‘B+,’ which is the highest rating on its ‘good’ scale but under its ‘A’ or ‘excellent’ scale. Explaining its rating, Oekom said the bank should be praised for using the CAB’s proceeds for funding renewable projects and categorically excluding those for nuclear energy or coal. However, “with respect to the framework loan to finance renewable energy and energy efficiency projects in Central America, more detailed information would be helpful to better understand what activities are financed and how potential risks are managed,” said Oekom in a backgrounder on its rating.Regarding the CAB’s investors, the EIB said there was strong demand from socially responsible ones, including Canada’s BMO Global Asset Management and Actiam of the Netherlands. Broken down by investor group, 58% of the bond’s subscribers were commercial banks and 32% asset managers. They were followed by central banks/public institutions (5% of investors) and insurers (also 5%).
“Actiam firmly believes that financial return and social return on investment can go hand-in-hand. Our acquisition of CABs from the EIB is an excellent example of this win-win combination,” said Erik Jan van Bergen, Actiam’s Chief Investment Officer, in a statement. Added Michiel de Bruin, Head of Global Rates at BMO: “After being one of the first entities to issues green bonds, EIB is keeping its commitment to increase transparency of the environmental impact of the projects. We support these developments.”