DZ Bank

Innogy, the German utility split off from RWE in April 2016, on Wednesday announced it would be holding investor calls about a new benchmark 10 year debut green bond issue. Later in the day, Standard & Poor’s upgraded the issuer to BBB.

Sustainability is a term used liberally and vaguely in the financial world. But it has a precise meaning: living so that we do not make it harder for future generations to live. That principle is violated by today’s economy, including its financial markets. But little by little, the heart of markets — the decisions investors make — is facing up to what it has long repressed. Jon Hay reports.

The much sought after trend for green bonds to outperform conventional paper in secondary trading is now a reality, according to public sector borrowers — but perhaps only for those with enough dots on their green curves to provide a comparison.

Public sector borrowers this week smashed through their conventional curves with green bond issues. But there was some debate over whether this marks the start of a trend or is merely the product of scorching conditions in both the euro and dollar markets.

Rating: Aa1/AA+

One borrower took advantage of an excellent backdrop to scoop up its first green funding in euros at an attractive level on Tuesday, while a second issuer is lining up to follow suit in dollars.

Germany’s federal election on Sunday caused ripples in government bond spreads throughout the eurozone on Monday, but concerns are subsiding already, allowing one agency to announce its first euro green bond.

Engie, the French energy group, priced its second green bond transaction of 2017 on Tuesday. The triple trancher contained two green clips and took the issuer’s tally to six different green bonds. As issuers start to establish genuine green curves, they are starting to create their own sector, writes Nigel Owen.

Rating: Aaa/AAA/AAA

Two high quality euro borrowers printed what may be among their last benchmarks of the year this week, squeezing new issue premiums flat to the curve as investors filled their boots.

The European Investment Bank raised €3bn with a December 2023 EARN on Wednesday, coming hot on the heels of Austria's €7.5bn dual tranche, but the flow of euro deals appears to be abating with no borrowers hitting screens for Thursday.

Austria has become the first eurozone sovereign to syndicate a 100 year bond, selling €3.5bn to investors desperate to pile cash into ultra-long paper.