Engie, AfDB and IADB Navigate Coronavirus Turmoil

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Stockholm (NordSIP) – As the COVID19 pandemic continues to plague the world, financial markets continue to reel from the volatility it leaves in its wake. However, some green shots have appeared to suggest green bond markets are not entirely closed.

On Friday 20 March 2020, ENGIE, a French multinational electric utility company operating in the fields of energy transition, electricity generation and distribution, natural gas, nuclear, renewable energy and Petroleum, issued €2.5 billion in a triple tranche bond. Of this total, €1.5 billion was evenly split in green bonds with eight- and twelve-year maturities paying 1.75% and 2.125% coupons. Natixis acted as Green Structurer as well as a lead manager on the syndicated transaction, a role it shared with Bank of America, Citi, Commerzbank, HSBC, Mizuho, Royal Bank of Canada and Société Générale.

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According to ENGIE, the new issue was significantly oversubscribed with total order book reaching over €9.5 billion at the final price. Following this transaction, ENGIE outstanding in green bonds totalled €11.15 billion.

“This successful bond placement is evidence of ENGIE’s recognized strength and leadership in the green financing market, notwithstanding the current health and economic crisis,” said Judith Hartmann, member of ENGIE’s executive leadership team, on this occasion. “This issuance further strengthens ENGIE’s already robust balance sheet, and provides enhanced liquidity to enable ENGIE to manage through the continuing volatility in our operating environments.”

Going forward, media reports suggest that the African Development Bank (AfDB) is in the market for a three-year social bond aimed at funding COVID19-related efforts. The AfDB has appointed BofA Securities, Citi, Credit Agricole CIB, Goldman Sachs International, and TD Securities as its lead managers for this US Dollar transaction. Initial price thoughts range within m/s + 40bps area. The transaction is due to settle on Friday, April 3rd.

The Inter-American Development Bank (IADB) is also in the market for a five-year Sustainable Development Goal (SDG) bond similarly targetted at dealing with the effects of the Coronavirus. The regional development bank has mandated Credit Agricole CIB, Deutsche Bank, Goldman Sachs International and J.P. Morgan to joint lead this transaction.

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