The green bond market is preparing for the latest iteration of the Green Bond Principles this week. The International Capital Markets Association will host the GBP’s annual general meeting in Paris tomorrow (Wednesday), where an updated version is expected to be published. Last year saw the introduction of the Social Bond Guidelines, which has helped boost the asset class. This year, no expansions are expected, but further revisions to ideas around green integrity and reporting are likely, according to insiders.
BNP Paribas Investment Partners will launch a green bond fund in September, it has confirmed. Speaking at last week’s RI Europe conference in London, Felipe Gordillo, a senior SRI analyst at BNP IP, told the audience that it was creating its first dedicated fund, as reported in RI earlier this year.
No further details were given, except that the fund would focus on hard currency deals, including euros and US dollars. It’s possible that BNP Paribas may launch further green bond funds in future, however, that are focused on local currency deals.
The French government has reopened its sovereign green bond after just five months. Following its ground-breaking debut in January, which saw it sell more than €7bn of notes, Agence France Trésor has now sold a further €1.632bn of green bonds via auction. This means there were no syndicate banks. This is a normal way for AFT to tap existing bonds and this deal was part of a larger fundraising round. The transaction was upped from €1.473bn on the back of high investor demand. The order book reached €2.8bn. Terms on the deal are the same as the original deal: a 1.75% coupon and a 2039 tenor.
Berlin Hyp has returned to market with its second green pfandbrief. The German real estate financier sold €500m of notes to finance sustainable buildings, as part of its plans to grow its green lending to 20% of its total loan book by the end of the decade. Pfandbriefe is an asset class specific to the German market, which uses a covered bond format. Berlin Hyp issued its first green pfandbrief in 2015, and in 2016 it issued an unsecured green deal. The latest transaction was an Aaa-rated, six-year offering which attracted €900m of orders within 2.5 hours of the order books being opened. It offers a coupon of 0.125%.Nearly half the buyers were “socially responsible investors”, according to the issuer. 43% were central banks and official institutions, while 31% were asset managers and 26% were banks. Oekom provided the second-party review.
CAP Group, which manages public water services throughout Italy, has secured approval from shareholders to issue a €40m green bond. According to a statement, CAP Group will use the bonds to help it finance projects that help create a circular economy. In practice this will involve a focus on waste-to-energy projects, it added. Reports say Unicredit has been mandated to sell the notes, which will have a 10-year tenor and be listed on the Irish stock exchange.
Barcelona-based environmental services firm Tradebe says it has raised what is claimed to be the world’s first green syndicated term loan. The “multicurrency financing” is Trabede’s main source of corporate funding, providing it with the ability to “comfortably fund its general corporate needs together with its future mid-term growth plan, combining organic growth with selective acquisitions”. It has been certified as a green by Sustainalytics. The €265m transaction was signed by 11 national and foreign financial institutions with “strong oversubscription” according to sole bookrunner BBVA.
China’s Three Gorges Corporation, which builds dams in the country, has sold its first offshore green bonds. The firm completed its debut deal last year, with a massive RMB6bn green bond to finance hydropower – claimed to have been the largest corporate offering out of China at the time. The transaction was highlighted by the Climate Bonds Initiative as raising “tricky questions” around the credentials of green bonds: the NGO said that it was unclear which standards the bond was certified against. RI was unable to get comment from the issuer or EY at the time, but now it has stated that its latest green bond has been verified – not certified – as aligned with the Green Bond Principles 2016. Deutsche Bank, JP Morgan and Bank of China are joint lead coordinators, joined by UBS, ICBC, Standard Chartered, Natixis and CCB International as book runners. The roadshow covered Hong Kong, Singapore and Europe.
Additional reporting by Paul Verney