European Investment Bank green bond ‘tapped’ to new €2.6bn record

Further evidence of burgeoning investor demand

The European Investment Bank has priced the sixth tap of its euro-denominated Climate Awareness Bond (CAB) due November 2019, taking it to a new high of €2.6bn – believed to be the largest green bond outstanding in any currency.

It’s the latest evidence, if any were needed, of the growth of the green bond market following the massive €2.5bn issue earlier this week by France’s GDF Suez that was three times oversubscribed.

Lead managers for the latest €350m transaction – which pays an annual coupon, or interest rate, of 1.375% – were Citigroup, HSBC, LBBW, Natixis and UniCredit.

“The transaction demonstrates increasing investor interest in the green bond product and strengthens the benchmark character of the bond,” the EIB said in a statement. The bonds give investors exposure to projects contributing to climate action, backed up by the EIB’s strong credit quality.The funds raised are earmarked for EIB lending to renewable energy and energy efficiency, such as wind, hydropower, wave, tidal, solar and geothermal production and so on.

“Increasing investor interest in the green bond product”

Since inception in 2007, CABs have raised the equivalent of €5.6bn in nine currencies. “Driven by strong lending activity, the EIB has issued over €2.5bn equivalent of Green Bonds across six currencies this year,” said the EIB’s Head of Capital Markets Eila Kreivi. Ulrik Ross, Global Head of Public Sector at HSBC, commented the EIB had again shown its “responsiveness to investor demand”.

The EIB plans to borrow a total of €70bn this year, similar to 2013’s €72bn.