Agencies face up to more QE, new platforms, life after Libor
European agencies trod carefully at the start of 2019 amid unsettled bond markets as the European Central Bank pulled the plug on its quantitative easing programme. But as the year has progressed, spreads and yields have rallied strongly as it becomes increasingly likely that the ECB will inject further monetary stimulus to aid lacklustre growth in the eurozone. Meanwhile, funding conditions in dollars pose a challenge with very tight US Treasury swap spreads and an unattractive euro/dollar basis swap keeping many of the European agencies away from the currency this year. Elsewhere, agencies are stepping up their preparations to follow their supranational peers in issuing bonds linked to the new risk-free rates in sterling, dollars and eventually euros as the date for Libor discontinuation approaches. Issuers are also having to cope with less information than ever before from bank syndicates as a result of increased regulation from MAR and MiFID. An initiative from the ECB, aiming to revolutionise the issuance and distribution of euro bonds has also placed the role of investment banks in the syndicate process under the spotlight. Some of the world’s leading agency issuers came together during the Global Borrowers & Bond Investors’ Forum in London in June to discuss these topics and many more in a specially convened roundtable.
Participants in the roundtable were:
Stefan Friberg, chief financial officer, Swedish Export Credit Corporation
Stefan Goebel, head of treasury, Rentenbank
Anish Gupta, managing director, treasury,
Joakim Holmström, head of capital markets,
Arthur Leijgraaff, senior treasury officer, FMO — Dutch Development Bank
Tom Meuwissen, general manager, treasury,
Frank Richter, head of investor relations, NRW.Bank
Rodrigo Robledo, head of capital markets,
Instituto de Crédito Oficial
Petra Wehlert, head of capital markets, KfW
Burhan Khadbai and Craig McGlashan, moderators, GlobalCapital
GlobalCapital: How do your funding volumes look in 2019 compared to previous years? Any big changes?
Frank Richter, NRW.Bank: Our funding volume is more or less unchanged from last year. We are looking for €13bn-€15bn equivalent in 2019 and we are already at €8bn, so we are feeling very, very comfortable.
Anish Gupta, Oesterreichische Kontrollbank: For OeKB, the funding volume for this year is €5bn. Over the last few years it’s been more around €3bn-€4bn, so there’s been an increase this year. This is on the back of more lending as the economy, and exports in particular, have grown. Next year, we expect a funding programme of €5bn as well. Year to date, we have done around €3bn.
Joakim Holmström, Municipality Finance: Our funding needs have been very stable over the last few years. Our working figure for this year is €7.1bn. Of that, we’ve done €3.5bn, so we’re in a decent position.
Stefan Goebel, Rentenbank: We are aiming to raise roughly €11bn equivalent, which is pretty much unchanged from the previous year and we are a bit more than halfway funded for the year at €6bn.
Tom Meuwissen, Nederlandse Waterschapsbank: Our annual funding needs are always around €10bn equivalent. This year will probably be a bit less. So far we have raised €4.4bn.
Stefan Friberg, Swedish Export Credit Corporation: We expect to raise approximately $8bn-$10bn this year. We’re a little bit ahead of the curve, both on the lending and funding side.
Petra Wehlert, KfW: We have announced funding needs this year of €80bn, so it’s slightly higher than last year’s €75bn but it’s in line with recent years where we have targeted a range of €75bn-€80bn.
We have already funded €53bn, so nearly 70% of our target.
Rodrigo Robledo, Instituto de Crédito Oficial: Our funding needs are slightly higher than in 2018. This small increase comes mainly from a stronger than expected year on our lending activity. Thus far we have completed around €3.4bn of a €4.5bn-€5bn funding programme, compared with a funding programme of €3.9bn in 2018.
Arthur Leijgraaff, FMO: We are a small issuer with funding needs of about $1.5bn this year. We’ve done $1.2bn so far, so $300m to go.
GlobalCapital: How does your funding compare between euros and dollars in 2019? Any big differences this year?
Richter, NRW.Bank: For us, it’s still two thirds in euros and one third in foreign currencies — with the bulk done in dollars, but also a little bit in niche currencies such as Norwegian kroner and Hong Kong dollars.
Friberg, SEK: We have funded ourselves a little bit more in the short end this year so the dollar market is a little bit more profitable for us there.
Goebel, Rentenbank: Our euro borrowing is currently at a record all-time high of slightly above 70%, while our dollar funding is, as we speak today, just accounting for a very tiny 4% of our overall borrowing.
We’ve had years in the past where the euro accounted for just 20% of our funding. This is simply due to the effects of the various QE measures of the ECB which is making the euro become the most attractive funding currency.
Holmström, MuniFin: We’ve been active in the benchmark markets of both euros and dollars, but also in other currencies as well. Roughly one-third, or slightly more, has been in euros. One-third has been dollars and then the rest has been in Norwegian kroner, Japanese yen and various other markets. We’re running quite a diversified funding programme.
Meuwissen, NWB: For us, it’s been mainly euros this year. The euro is, because of all the ECB measures, far more competitive. It’s very difficult to find arbitrage offering better levels than the euro. Of course the dollar/euro basis swap has also not been very attractive this year so far and you see this reflected in how much issuance has been done in euros.
Leijgraaff, FMO: We do more in dollars because we have assets mainly in dollars, so on the funding side we want to match that. We do issue in other currencies than dollars and in general, we swap all non-dollar funding back to dollars. But we do monitor the euro/dollar basis swap to compare dollar issuance versus euro issuance.
We usually reserve euros more for green, sustainability, or eventually social bonds, because we see an investor base for those types of bonds being more developed in the euro area rather than in dollars.
Gupta, OeKB: What we see is that dollar funding is much more attractive on an all-in basis for us. In euros, you have the disadvantage of negative yields in the short-end, so it makes more sense to issue euros for long-term funding, while dollars is the choice at the front to medium part of the curve.
Robledo, Ico: The funding cost in the euro market has dropped to historic levels. In 2019 we have seen new issue premiums tighten or even disappear for some issuers in the euro market. In our case, we printed our inaugural green bond in April in euros at 7bp versus Bonos, with no new issue premium.
At the end of last year, there were some concerns about the start of 2019, especially with the volatility that came from Italy and Brexit. However, since the very beginning of the year, the mood has been quite positive. News about the trade war, Brexit or Italy do not seem to have undermined the favourable market conditions for issuers so far.
Wehlert, KfW: In terms of currencies, we have funded 57% in euros and 21% in dollars. We now issue euro benchmarks off our EMTN [Euro Medium Term Note] programme, which gives us much more flexibility and efficiency.
GlobalCapital: So, are you all looking to go longer in euros to avoid negative yields? How else has the increased talk of more QE affected your euro funding strategy?
Gupta, OeKB: The objective would still be first and foremost to match our lending. So it wouldn’t make sense for us to go all the way out in the curve just to make a positive yielding asset available.
What’s encouraging is that the ECB has harmonised its list of agencies recently, and so from August 5, OeKB would be eligible for the PSPP, which obviously would help us in any euro issuance.
Meuwissen, NWB: But you see a lot of interest from insurers for really long term issues and we have a natural interest in that because of our long-term lending.
We issue up to 35 years and at historically low yield levels. But in the current environment, and with the expectations on interest rate developments, demand in the very long term remains very strong. When you look at the previous developments of long term bonds, you can see that even in this environment, these investments can be very profitable.
The ECB already owns up to a third of our paper, and when they reinvest redemptions they will buy us anyway. So if they bring a new programme it won’t really impact our debt.
Holmström, MuniFin: Our view at the end of last year going into the end of QE was that we expected spreads to start gradually widening.
Therefore, we went out early in the year with our strategic euro trade. We got a very nice transaction done in the five year maturity space. Since then, spreads have stabilised and even performed. Going forward we will continue to execute our funding plan with further benchmark issuance.
Robledo, Ico: In the context of low yields in the euro market, public issuers have been extending the duration of new public transactions in euros to avoid negative yields, which would not allow some investors to participate.
At Ico, after a deal related roadshow and getting feedback from investors, we decided to print our euro trade this year with a five year, rather than a three year maturity, in part for this reason. At the same time, we have seen SSA players more active in short dated dollar deals in the public market as they can get very competitive levels after the swap.
It’s fair to say that the market was right in anticipating a more dovish tone. This has been proved recently in the last ECB meeting and by the FOMC in June.
Negative yields in the shorter part of the curve have pushed investors to longer maturities so issuers have extended the duration of their public trades in euros.
Goebel, Rentenbank: The average life of our new issuance is 7-1/2 years, year-to-date. Falling interest rates are driving investors ever further out on the curve in a quest for a positive yield.
Wehlert, KfW: The impact on our euro funding strategy is limited. Nothing much has significantly changed. We still feel comfortable issuing in the euro market.
We’ve definitely seen a rally in euro SSA spreads this year. If you look at the overall levels, we are at last year’s new issuance levels.
We are at all-time lows in absolute yield levels. For example, our 10 year euro benchmark is trading in negative territory. But investors are more focused on relative value such as spreads to OATs and Bunds.
Richter, NRW.Bank: From an asset liability management driven perspective, we are moving from 5-1/2 years to close to seven years. We have longer-term demand on the loan side, so the funding is following the lending side.
GlobalCapital: How are funding conditions in the dollar market?
Holmström, MuniFin: For us, dollars is a strategic market and we are committed to issuance in that currency, despite funding costs. We’ve done a five year benchmark this year which was three times oversubscribed with the biggest book for a MuniFin dollar benchmark ever.
Going forward with these super tight swap spreads, things might be a little bit more tricky. For now, the widening of asset swap spreads have been offset by the cross-currency basis. If this changes, you might see less dollar issuance from euro based funders.
Gupta, OeKB: That’s the challenge, right, the tight swap spreads. The spreads to Treasuries are that so low that it can become a hurdle for some investors to accept.
Goebel, Rentenbank: The volatility of US Treasury swap spreads itself also makes it difficult to identify a clear issuing window where you can go into the dollar market with a clear price guidance versus mid-swaps and be confident.
Wehlert, KfW: The overall dollar SSA market is undersupplied. Due to the cross-currency basis swap, conditions are more attractive in euros, which explains our reduced presence in the dollar market this year. However, we typically expect to issue at least one dollar benchmark every quarter.
Richter, NRW.Bank: I have to say that we found a nice swap in May when we did a four year dollar trade. The targeted size was $500m but there was huge demand coming in the order book and in the end we were able to print $750m. Luck was on our side and the swap disappeared.
We also did a dollar transaction early in the year in January when the sentiment was more on the bearish side. Everybody was pricing in hikes from the US central bank, and there was demand for short-dated floaters, and that is demand which we are catching up with and the reason why our dollar quota is a little bit higher this year.
Goebel, Rentenbank: Arguably, inflation in the US is currently going nowhere. You can look at it from any angle you like. But Donald Trump, from my perspective, has a point here, that the US Treasury has proactively raised interest rates, being concerned about an inflation rate that has never really gone up enough to make this move really necessary. Whether it’s warranted against the backdrop of other economic parameters is debatable. But it’s not like the Fed had to hike to prevent inflation from getting out of hand.
Gupta, OeKB: Turning to Europe, Draghi will be the first head of the ECB to have never raised interest rates, while the US Federal Reserve has the chance to stimulate monetary policy. In Europe we would need to go deeper into QE and deploy other extraordinary monetary policy measures.
Richter, NRW.Bank: Does anybody expect an interest rate hike in Europe in the long term or is it low forever now?
Friberg, SEK: It’s not low forever. I am the CFO, so I care about our profitability, and from our profitability perspective, I would love to see some rate hikes in Sweden. The return on our capital is not great right now, so if we could see a one percentage unit rate hike, I would like that. That would increase our profitability by 7%. I’m begging for it, but the likelihood is zero.
Gupta, OeKB: But the lower rates cannot solve everything, right? The central banks cannot be the only game in town. We have to think in terms of other measures, maybe on the fiscal side to start with.
Friberg, SEK: It is starting to create problems. I can use my small country as an example. Some 85% of people below 30 years of age cannot buy an apartment in Stockholm. It’s only their parents who can buy and these are problems that this environment creates. You’re only allowed to borrow around 4-1/2 times your gross income and with prices rising like this — it’s impossible.
Goebel, Rentenbank: Actually, this is a very interesting point you are making, and I would like to extend that to the question of why we have such a low inflation rate in the eurozone?
Arguably, this negative interest rate policy has triggered a massive asset price inflation and when it comes to house prices, this basically constrains the ability of young families to buy a house at all. Or they have to get indebted for much longer, so maybe less money is available for other things to spend on.
GlobalCapital: Let’s turn to the sterling market, where we are at record levels in terms of supply despite the uncertainties of Brexit. What has been driving the strong demand?
Goebel, Rentenbank: From what I’ve heard, the strong demand is because of Brexit.
As I understand it, the UK regulator asked the bank treasuries to top up their liquidity reserves, their LCR [liquidity coverage ratio] portfolios, because, should there be a hard Brexit, then access to the funding markets of the EU might be disrupted temporarily and so you should have some liquidity buffer.
The basis swap has also worked, so funding cost-wise those transactions have worked comparably well to euros. We haven’t made a killing, but it was at least in the area where we could attract euro transactions.
Gupta, OeKB: The strong uptake in the sterling market this year has been surprising so that has changed our funding mix a little bit more towards sterling. We didn’t start off the year thinking we’d be doing so much in sterling.
Sterling supply has definitely been helped in part because of Brexit preparations for banks, but also there is a lot of pent-up demand due to redemptions.
Wehlert, KfW: To our positive surprise we have been very active in sterling.
We have raised nearly £6bn so far this year. We issued our first sterling transaction of the year in the first week of January, which was also our largest sterling new issue so far.
Our sterling trades this year have all been in fixed rate format. What’s driving demand in sterling is that UK bank treasuries are looking for liquid HQLA [high quality liquid assets] assets and KfW fits that requirement.
Meuwissen, NWB: Sterling is mainly attractive for dollar issuers, not so much the euro issuers in the current environment. We monitor this market closely but so far the arbitrage hasn’t really been there.
Richter, NRW.Bank: We made the same observation that it was not working from an economic perspective. Usually, we try to be active in the sterling market at least once a year in size, but for the time being, we are sidelined.
Is everyone prepared for doing floating rates in Sonia? We ran through the internal processes and from a technical perspective we are able to do an issue in Sonia now.
Friberg, SEK: We have already dipped our toe in. Not for a funding purpose, but more for trying and testing the internal system.
As we’re such a small firm, it is always a challenge when we have to make large adjustments to systems and business models in a short period of time. For a larger firm, it’s easier to put 100 people aside to work on a project like this. But we only have 240 employees, so for us, it is challenging to run larger projects.
Goebel, Rentenbank: We went through a new product approval process but we discontinued that because, first of all, we didn’t understand how potential negative daily fixings of Sonia would feed into the coupon. Then we didn’t really know how to deal with it also in our risk systems with the embedded 0% floor in that product.
Leijgraaff, FMO: This year we want to be prepared for Libor discontinuation from a contracting, system and valuation perspective, but we are not there yet. If we can get our systems compliant this year, maybe we can start issuance in Sonia this year.
Gupta, OeKB: Same with us. We are also in the preparatory phase of Sonia issuance and further down the line we’ll look to issue in this format.
GlobalCapital:: What about Sofr issuance? That seems to be some way behind Sonia.
Friberg, SEK: Sonia obviously has an advantage. Sonia was already functioning with a funding curve. With Sofr, it will take a little bit of time because a lot of people are waiting for the final Sofr methodology for issuing and I think, especially for some of the real money accounts, they don’t want to adjust their systems twice, so they will wait.
Richter, NRW.Bank: I agree. A lot of investors are not ready to make the settlement of bookings for Sofr trades.
Gupta, OeKB: For the development of the market, it would be good to have one standard for Sofr.
Leijgraaff, FMO: Sonia issuance is much more developed than Sofr. Maybe there’s even more Sonia issuance these days than sterling fixed rate bonds.
GlobalCapital:: We’ve talked about euros, dollars and sterling. But what about niche currencies? Which have been most in vogue this year?
Holmström, MuniFin: The big surprise this year has been the Norwegian krone, which has become our third largest funding currency.
We’ve done €800m equivalent in Norwegian kroner this year, which is a lot. The basis has also helped, so it’s attractive. MuniFin is 0% risk weighted and a level 1 HQLA asset in Norway, so bank treasuries are large buyers of our bonds. There have also been some Norwegian government redemptions, which has also triggered interest.
Richter, NRW.Bank: We issue in Norwegian kroner out of our MTN programme, so without a domestic ISIN, but of course we’re thinking about setting up a separate programme to do so.
Gupta, OeKB: For us, it’s been Norwegian kroner and the Swedish kronor.
Leijgraaff, FMO: For us, it’s also Swedish kronor, but sold into Sweden, so that may be a bit different. The Swedish krona is our second biggest funding currency this year after the dollar. We have also been pretty active over the last two years in frontier currencies to promote and develop local capital markets. For example, we recently issued a Haitian gourde bond.
We have been always active in Aussie dollars, but what we see now is that Japanese investors favour the euro and Swedish krona market over the Aussie dollar market when looking at hedging costs.
Richter, NRW.Bank: We only have approval for issuing in developed markets but our business model is also totally different from yours.
Wehlert, KfW: Sterling is our number one niche currency, followed by the Norwegian krone and Swedish krona.
GlobalCapital:: Any particular trends within the MTN market?
Gupta, OeKB: There are ever fewer Libor-based FRNs in the MTN market as we approach the discontinuation date. As such the maturities that we can do are becoming ever shorter.
Holmström, MuniFin: In general, we see much less enquiry for private placements.
It feels like investors’ focus has moved away from illiquid private placements and more towards the liquid benchmark market, which is a shame.
In the long run, this means less diversification. The average funding cost will also be impacted as private placements tend to be a more cost-efficient funding source than public benchmarks.
The change in the Japanese Uridashi market has also been dramatic. We’ve witnessed a significant drop in volumes and the whole market is shrinking. Demand has also shifted down the credit curve to lower rated issuers like banks.
Leijgraaff, FMO: We mainly issue MTNs in frontier markets, so they come with a small size, starting from around $5m and up to $20m. They are usually short-dated, so two or three years, but sometimes five years. We have done about $100m of MTN issuance year-to-date, and we hope to issue another $100m in the second half of the year.
Wehlert, KfW: We have been very active in Chinese yuan in the MTN market and have printed 13 transactions so far this year, all with very short maturities. We see significant demand in this currency.
Robledo, Ico: We are particularly active in short dated dollar private placements. These types of deals provide us with very competitive levels versus euros after the swap.
GlobalCapital:: There’ve been suggestions that syndicates are unable to communicate with one another as much as in the past and so have less information about the market. Do you agree?
Goebel, Rentenbank: There is an element of truth to that, definitely. If you have two banks pitching an opportunity for a €50m tap and you try to figure out if they are talking about the same investor, that sometimes can be a hassle and sometimes you wake up to a disappointment here because of the lack of ability to disclose names.
Gupta, OeKB: I generally agree. The information that we need to work with has been reduced ever since MAR and Mifid were introduced. But it’s not a huge issue that we cannot work around. And the so-called shadow order books which used to exist years ago have gone.
Goebel, Rentenbank: One effect of the market regulation that must not be ignored is that if you are an investor and you allow a bank to talk to you and to present you with a certain new issue idea, then at that very moment you are conflicted in buying other secondary market paper from that issuer. You probably don’t want to kick yourself out of being able to buy cheaper stuff in the secondary markets.
Richter, NRW.Bank: From our experience, I would say we disagree. We get good colourful pictures from the syndicates of several banks, so we do not fear that there is a decrease in quality.
GlobalCapital:: With that in mind, the ECB is pushing forward plans for a European Distribution of Debt Instruments (EDDI) initiative. What are your thoughts on this? Do you see syndicates having a lesser role to play in this platform?
Gupta, OeKB: My bottom line on this is that there will always be a role for financial intermediaries to provide advice, intelligence and support in the secondary markets, and also other services for us to be able to function as borrowers.
Friberg, SEK: I was starting to think about this and I figured, how do investors get to know about us? I don’t know the investors, so I need someone to introduce me to them — so that means the investment banks. Once investors know me then they can buy me on the platform.
Holmström, MuniFin: It works in the retail market where investors and issuers can meet on a platform, but if you have to raise, for instance, €500m in one transaction and expect settlement in five days’ time, it doesn’t work. You need banks acting as intermediaries. The underwriting commitment is perhaps the most important part.
Richter, NRW.Bank: There is a digital revolution on the one hand, and on the other hand, it looks like we are all happy with the current system.
Friberg, SEK: It’s solving a problem that no one knew existed, for now, at least.
Goebel, Rentenbank: I understood that it was not their intention in the initial stage to cut out the middleman. They’re not looking to impact the syndication process.
Gupta, OeKB: But one thing, to be fair, is that it has been presented as something that you can voluntarily participate in. It’s not mandatory. It’s not that the regulator is saying: ‘you’re issuing euros, so you have to use this’. That’s not the way it’s being thought of, at the moment, at least.
Goebel, Rentenbank: In the normal order of events, a large enough number of market participants feel that there is a deficiency and then they ask someone to come up with a solution and then a solution is presented. But here, a solution has pretty much been presented out of the blue for a problem I’m not fully aware of.
Also, the ECB is not going to do it for free, and also, quite honestly, the ECB was supervising Rentenbank for over four years but we were doing our best to bring that to an end and we were happy that we succeeded. So, I’m not sure that it is the ideal organisation to come up with these things.
GlobalCapital:: How important is the EU’s green taxonomy for the development of the socially responsibility investment (SRI) bond market? Are you happy with it in its current form, or would you like to see changes?
Wehlert, KfW: Overall, it’s a positive development. It provides guidelines in terms of sustainability consideration to the financial market, which we were waiting for. Issuance in the SRI bond market is at an all-time high. There are many new issuers coming to the market and we are increasingly seeing credit rating agencies include ESG ratings.
Robledo, Ico: It’s a good first step, which was needed for adding more clarification in regard to sustainable assets, as well as to enlarge the investor base by providing comfort to new potential participants.
This could boost the green bond market even more. However, as an established and committed participant in the social bond market, we lack some clarification on social taxonomy. We feel that the European Commission is too focused on developing recommendations on the green side but should include the social side as well, as we believe both are important in the sustainable finance area.
Richter, NRW.Bank: Overall we think a practicable standardisation is necessary, especially if you want to scale up the market. Although there are details that can still be discussed, we feel comfortable with the approach that the EU has taken.
However, our first impression is that the look back period of three years is too long and that a 30% improvement on energy consumption via upgrading the housing stock is too ambitious. This ceiling may keep issuers sidelined.
Since 2013 we have been committed to issuing green bonds on an annual basis and were the first European regional agency to do so. Over time we’ve seen the green market develop and we have developed with it, such as the alignment to ICMA’s green bond principles, UN SDGs, second party opinion, impact reporting and non-financial disclosure. Earlier this June we published our green bond framework online.
An important aspect of our approach to project selection is that the underlying assets must be loans no older than 12 months before the start of the second-party opinion process. This way we ensure that the assets are fresh and state-of the-art, thereby increasing the environmental impact of green bonds in comparison to bonds with assets that are older.
Also, since the maximum term of the bond is determined by the shortest loan maturity, all selected projects are operational and there is no risk of a green default. As a consequence, the loan portfolio remains unchanged during the term of the issue, which means that one-off reporting is sufficient, allowing the investor to know from the start exactly which projects are tied to the bond. The ecological benefits and quality of the selected projects are analysed and assessed by ISS-oekom research in its second party opinion of the bond.
Holmström, MuniFin: We are delighted to see the recent publication of the EU taxonomy and the Green Bond Standard.
We have been an active green bond issuer since 2016 and from our perspective, both are welcome in order to set standards for the market and impact reporting.
The EU Taxonomy, or classification system for environmentally sustainable economic activities, will make it easier for investors to compare issuers and direct investments to companies with the highest ESG goals.
Regarding the green bond standard, there are still some open questions, especially regarding the external verification and selection criteria for some categories, but we remain positive to comply with the standard as and when it comes into effect.
Robledo, Ico: There are some other market movements that are worth mentioning.
We are seeing more sovereigns come to the green bond market, and others that are announcing they will be coming soon.
Themed bonds have also gone further than green, social and sustainable bonds and bonds with other denominations have come into play, such as bonds linked to the UN’s Sustainable Development Goals. The publication last year of the Green Loan Principles and Sustainability Linked Loan Guidelines could be considered as a push towards the development of these types of bonds.
In the case of Ico, we issued a social bond at the end of last year, a green bond in April this year and we expect to issue our sixth social bond in the second half of this year.
Leijgraaff, FMO: Our Sustainability Bonds Framework was updated in December last year to include new categories for green and social projects, with corresponding eligibility criteria in the use of proceeds, and to allow FMO to issue green bonds, social bonds or sustainability bonds to align with FMO’s strategy.
We will use the proceeds to finance, in whole or in part, existing and future projects that have a positive environmental impact and social projects aimed at reducing inequality.
After issuing €1.8bn of sustainability bonds since 2012, we launched our first green bond in February this year.