TMCnet News
EIB-CAB 2026 creates new benchmark on EIB's Green Bond curve(ENP Newswire Via Acquire Media NewsEdge) ENP Newswire - 05 September 2014 Release date- 04092014 - Today, the European Investment Bank (EIB), the EU Bank owned by the EU Member States, rated Aaa/AAA/AAA (Moody's / Standard and Poor's / Fitch), issued a EUR 500m Climate Awareness Bond (CAB). The issue carries an annual coupon of 1.250%, has a final maturity date of 13 November 2026 and has been priced in line with the existing EIB ECoop curve at MS+1bp. With this new issue, the EIB starts building a Green Bond curve in the EUR market. The bond is EIB's second CAB distributed in mini-benchmark / ECoop format, which foresees a size of at least EUR 500m and EUR 250m minimum re-openings upon actual demand. The EUR 2.6bn ECoop CAB due 11/2019, first launched in July 2013 for an amount of EUR 650m, is currently the largest Green Bond outstanding. The long, 12-year tenor of the bond now provides investors with a maturity that well reflects the duration of renewable energy and energy efficiency projects financed by the EIB and eligible for Climate Awareness Bonds. The bond generated strong demand from a range of investors genuinely interested in the socially responsible features of the transaction (i.a. Actiam, Aegon, APG, APK Pensionskasse, Banque Syz & co., Gutmann KAG, Natixis AM, etc.), particularly from the Netherlands which accounted for 38% of distribution. Asset managers, insurance companies and pension funds provided over 63% of distribution by investor type. Investor allocation: By Geographical Region By Investor Type Netherlands: 38% Asset Managers: 56% Germany: 28% Banks: 27% Scandinavia: 15% Insurance & Pension funds: 7% France: 9% Central Banks/Off Inst's: 7% Other Europe: 10% Other: 3% Joint Bookrunners for the transaction were Credit Agricole CIB, DZ BANK, Rabobank and Raiffeisen Bank International - leading European co-operative central banks and active members of the UNICO Banking Group. Co-operative banks have the principles of solidarity and social responsibility at the heart of their culture and mission. As such, all four banks have contributed significantly to the development of the sustainable financing solutions in their home markets not only by addressing social challenges but also by financing the 'Green transition' via investments in renewable energies as well as energy efficiency projects. They now join forces in supporting the further development of the Green Bond capital market segment, which they recognize as a catalyst of lending activity and transparency in these areas. Climate Action - a top priority of the EU and EIB A key instrument of EU public policy, the European Investment Bank is a market leader in the financing of projects tackling climate change worldwide, with EUR 19bn lent in 2013 alone. EIB's 2014 to 2016 Corporate Operational Plan sets an annual target of over 25% of finance directed to climate action. Within climate action, the EIB strongly supports Renewable Energy and Energy Efficiency, meaningfully contributing to the EU's climate change and energy sustainability objectives. EIB's overall lending in these areas in 2013 reached a record EUR 8.6bn, almost double the volume attained in 2012 (EUR 4.4bn). Climate Awareness Bonds CABs provide investors with the opportunity to associate their investment with projects contributing to climate action, while enjoying the excellent credit quality of EIB as an issuer. The funds raised via these issues are earmarked for EIB lending projects within the fields of renewable energy and energy efficiency. These projects include, but are not exclusive to, respectively: renewable energy projects such as wind, hydropower, wave, tidal, solar and geothermal production, energy efficiency projects such as district heating, cogeneration, building insulation, energy loss reduction in transmission and distribution, and equipment replacement with significant energy efficiency improvements. EIB's strict earmarking approach entails the ring-fencing of proceeds in a dedicated liquidity portfolio. Pending disbursements, the sub-portfolio is invested in money market instruments. The EIB provides transparency on the destination of CAB proceeds through regular reporting via the annual Sustainability report (formerly Corporate Responsibility report) and the dedicated Climate Awareness Bond Newsletter. Since inception in 2007, CABs have raised EUR 6.2bn equivalent in 9 currencies. International climate agenda The important contribution of green bonds will be highlighted at the Climate Summit being hosted by United Nations Secretary-General Ban Ki-moon in New York in September. The Summit will serve as a public platform for leaders to advance climate action and ambition. The EIB will participate in both the summit itself and high-level side events to emphasise the EU bank's commitment to climate finance, share experience from projects around the world and highlight the importance of funding through green bonds. EIB Climate Awareness Seminars Paris, 23 May 2014 (hosted by Credit Agricole) Utrecht, 11 September 2014 (hosted by Rabobank) Vienna, 15 September 2014 (hosted by RBI) Comments on the issue: Issuer: Eila Kreivi, Director and Head of Capital Markets Department at the EIB, said: 'EIB is highly engaged in climate action, a key priority on the EU agenda, and is fully committed to the meaningful development of the Green Bond market, the importance of which is growing day by day. In EUR, our core currency, this requires the build-up of a reference curve and the diversification of the investor base. Both goals are served well by today's landmark transaction, the first to extend this benchmark approach to maturities beyond ten years and to achieve maturity congruence with eligible projects in the areas of renewable energy and energy efficiency. The issue, which has been welcomed by a number of socially responsible investors in spite of the current low level of interest rates, will be increased strategically to meet actual investor demand.' Banks: Pierre Blandin, Global Head of SSA DCM at CA-CIB, said: 'This new issue is a cornerstone in the build-up of the EIB CAB curve and a strong message in advance of the UN Climate Summit. It highlights EIB's leadership and commitment to developing the Green Bond segment of the Capital Markets. By offering a long dated tenor that is closer to the maturity of the EIB loans in the Renewable Energy and Energy Efficiency sector, EIB were able to attract strong demand from a wide range of European climate conscious real money accounts.' Patricio Bustos-Heppe, Executive Director at DZ BANK, said: 'The EIB has once again shown strong leadership with regard to financing renewable energy and energy efficient projects. This 12-year Climate Awareness Bond is, indeed, a very attractive investment proposition which equally matches the lending to projects of this nature. DZ BANK is delighted to be part of this project by the EIB. This is particularly true in light of its long-standing commitment and significant contribution to the development and sustainable funding of 'green projects' in Germany. Clearly, these are values commonly shared by the European central cooperative banks (UNICO Banking Group) which have been awarded a bookrunner position for this trade by the EIB.' Sachin Shah, Director at Rabobank, said: 'With this new transaction, EIB has once again showed its leading role in the development of the SRI fixed income market by providing investors with the first long dated SSA benchmark issue in this sector. The issue was well received by SRI investors, particularly from the Benelux. Sustainability is a core value of Rabobank and we are proud to be involved in this transaction alongside other UNICO Banking Group members, who share the same values.' Attila Farsky, Head of Debt Capital Markets FIG&SSA at RBI International, said: 'With this transaction EIB has demonstrated once again to be at the forefront of the capital markets, by issuing a new reference point in the long-end of its outstanding Green Bond curve. The new 12-year CAB bond certainly represents an interesting investment opportunity for Socially Responsible investors and definitely contributes in enhancing the overall 'Awareness' in the financial markets on the topics of Renewable Energy and Energy Efficiency. Alongside the UNICO Banking Group, Raiffeisen Bank International has since long time shown a strong commitment in the areas of Sustainability and Green Financing and is therefore honoured to be a partner of the EIB in this project.' Investors: Hendrik Tuch, Senior Portfolio Manager at Aegon Asset Management, said: 'The Climate Awareness Bond issued by the European Investment Bank fits within our existing mandate guidelines and our impact investing approach in which we select investments that meet our existing risk and return requirements, but also have the intent to create a measurable social or environmental impact. We think the market for green bonds will grow considerably in coming years as the appetite from investors is more than sufficient to cover an increasing issuance level.' Rainer Koenigs, Portfolio Manager at Deutsche Bundesstiftung Umwelt, said: 'It is good to develop this market segment further. The elements of market conformity, liquidity and sustainable investment have come together nicely on this new issue.' Marc Briand, Head of Fixed Income at Mirova, said: 'We are keen to see the Green Bond market develop. Mirova has been involved with the EIB Climate Awareness program since its inception. Today, we welcome in particular their transaction, which creates a second green point on their liquid curve.' Summary Terms and Conditions for the new bond issue: Issue Amount EUR 500m Pricing Date 3 September 2014 Payment Date 10 September 2014 Maturity Date 13 November 2026 Issue Price 98.738% Coupon 1.250% Re-offer Spread MS+1bp Format: CAB Listing Luxembourg BACKGROUND INFORMATION EIB funding strategy and results The Bank's funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2014, the Bank plans to borrow ca. 65bn. It raised EUR 72bn in 2013. Background information on EIB The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Bank's strong credit standing is underpinned by exceptional asset quality, a strong capital base, firm shareholder support, conservative risk management and a sound funding strategy. Investor Relations [email protected] +352 43 79 - 53000 Print E-mail Pdf Investor Relations [email protected] +352 43 79 - 53000 (c) 2014 Electronic News Publishing - |