The € 500 million green bond matures in 2042 and pays a coupon of 1%. It was priced with a spread of 1bp through mid-swaps, equivalent to +59.9bp over the July 2042 Bund, a tightening of 1bp vs. initial price guidance.
“This transaction marks the start of EIB’s sustainability funding in 2019. It establishes a direct link between debt capital markets and the ongoing development of a coherent classification of sustainable investment. The goal is to facilitate capital markets’ contributions to sustainable development,” according to Eila Kreivi, Director and Head of Capital Markets at the EIB.
According to the press release, this transaction aligns CAB documentation with proposed EU legislation regarding the creation of an EU Taxonomy to clarify the environmental impact of investments in the region. The EU Bank’s technical contributions and capital markets strategy are also highlighted in two White Papers on the need for a common language in Green Finance, published jointly by EIB and the China Green Finance Committee.
“The European Commission and the EIB are working together for more clarity in sustainable finance. This clarity is essential to facilitate long-term sustainable investment. We highly appreciate this joint endeavour. ATP strongly supports and encourages for more transparency and traceability in sustainable finance,” said Lars Dreier Kristensen, Senior Portfolio Manager at ATP.
French investors purchased 36% of the bonds, followed by Scandinavian (30%), German (16%), Dutch (8%). The remaining 13% was purchased by other undisclosed miscellaneous European countries. Sectorally, pension funds were dominant, lending 59% of the funds, followed by fund managers’ 30%. The remaining 11% was purchased by banks.
Following this transaction, there is € 22.2 billion of CABs outstanding, across 27 lines with maturities up to 2047. As of 4 April 2019, the EIB had raised over € 24.5bn, almost 50% of the announced € 50bn programme.