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Green and Social Bonds and Loans

Keeping Tabs — bringing production home, your passport to work and sunshine to the North

Each week, the very best of what our newsroom have found most useful, interesting and informative from around the web. This week: what being in charge of a leading reserve currency actually means, how business travel might return, and a power play from Warrington Borough Council.

12.45 PM
AIIB mandates for debut Panda bond

The Asian Infrastructure Investment Bank has hired banks for a renminbi sustainable development bond, its first outing in the Panda market.

09.00 AM
CAF captures Covid funds with social bond

Latin American development bank Corporación Andina de Fomento expects the social bond universe to grow after bringing forward its debut social bond to raise funds for its Covid-19 mitigation efforts.

28 May 2020
Green convertibles arrive with Neoen blowout

Neoen, the French solar and wind energy producer, has issued the first green convertible bond in Europe — and investors’ eager reception of the deal suggests these instruments could be as popular in the equity-linked market as they have become in the straight bond market.

28 May 2020
BBVA brings Covid-19 bonds to European credit markets, others to follow

BBVA surprised market participants by becoming the first bank to issue a Covid-19 response bond in Europe this week. There will be follow-on deals as the format catches on in credit markets — high grade corporates are looking to do deals too — but it is unlikely to be exploited as widely as it has been in the SSA market. David Freitas and Mike Turner report.

28 May 2020
Denmark reveals three banks helping on strippable green bonds

Denmark has made public the mandate it had given earlier this year to three banks to help it prepare to issue the world’s most unusual green bond, as the work is getting to a more advanced stage. A political decision to issue might come towards the end of this year.

28 May 2020
ESG offers way out of panic market as investors bundle in

Corporate bond investors piled into the three environmental, social and governance trades on screens this week, as bankers said the focus in the high grade market is shifting from crisis mode back to socially responsible debt.

28 May 2020
France smashes 20 year as demand heats up in long end

France impressed as it received a record €51bn order book and paid a small new issue premium with its first syndication since the outbreak of the Covid-19 pandemic. The sovereign was joined in the long end of the curve this week by two sub-sovereign borrowers as investor appetite for duration grows, with more supply expected to follow.

28 May 2020
Wallonne hits long end with debut social bond as Bpifrance takes size

The Belgian region of Wallonne took advantage of the growing demand in the long end of the curve to sell its first social bond on Thursday, although it had to pay a chunky new issue premium to do so. Elsewhere, Bpifrance received plenty of demand to print €1.25bn with a 10 year trade.

28 May 2020
ESG offers way out of panic market as BASF and Pearson launch deals

BASF and Pearson brought green and social bonds on Thursday, as sustainability-linked issuance continues to pull Europe’s high grade corporate market out of the darkest days of the coronavirus pandemic’s panic funding phase.

28 May 2020
China’s special Covid-19 treasury bond disappoints in size, sparks debate on central bank’s role

China is reviving the issuance of its special treasury bonds, a funding tool it has not used since the financial crisis. But bankers were underwhelmed by the Rmb1tr ($140bn) size target — and are also hoping for clarity on how the ‘anti-pandemic’ deal will be financed. Addison Gong reports.

28 May 2020
CapitaLand raises S$500m from sustainable loan

Singapore’s real estate group CapitaLand has bagged its fifth sustainability-linked loan, after sealing two green deals just last month.

28 May 2020
CAF tightens euro five-year after accelerating social bond framework

A strong bid from ESG investors helped Latin American development bank Corporación Andina de Fomento (CAF) to €700m of social bond issuance on Wednesday as the multilateral looks to fund its efforts to support the region through the Covid-19 crisis.

28 May 2020
Loanpal preps first solar ABS since outbreak

Loanpal is bringing the first solar securitization to market since the Covid-19 outbreak. The deal is the first of several solar ABS lining up for the coming weeks, sources said, with at least two other 144A deals in the works.

27 May 2020
France breaks book record as SSA investors seek duration

France received its biggest ever order book as it came to the market for a 20 year syndication on Tuesday. SSA bankers say that investors are looking for duration after previously sticking to defensive maturities as the Covid-19 crisis eases.

27 May 2020
ESG back in focus as Severn Trent order books bulge

Severn Trent, the UK water utility, achieved blowout demand on Tuesday for its sustainable bond, as bankers say the focus in the high grade market is shifting from crisis mode back to socially responsible debt.

26 May 2020
Saudi to raise groundbreaking green ECA loan

Saudi Arabia is set to raise its inaugural green loan with export credit agencies next month. The groundbreaking loan would be the first of its kind in the Middle East.

26 May 2020
Covid-19: SSA response bonds

SSAs are mobilising their resources to support the fight against Covid-19. The below table details the bonds they have issued in response to the coronavirus pandemic.

26 May 2020
People moves in brief

Citi picks Nick Darrant as syndicate head — And it sets up new sustainability and science units — JP Morgan reveals next layer of DCM, ECM and M&A bosses

21 May 2020
ESM ‘analysing’ issuance of social bonds to fund pandemic response

The European Stability Mechanism is looking at creating a socially responsible bond framework to fund its pandemic crisis package of credit lines to support euro area member states in the financing costs related to the Covid-19 crisis.

21 May 2020
Ferrari and Southern Water Services roar through high grade market

Italy’s Ferrari in euros and the UK’s Southern Water Services in sterling won strong demand for new bonds on Wednesday, but the slowdown in issuance has got some syndicate officials wondering if the market is already winding down for summer.

20 May 2020
RBS spies ‘pricing advantage’ in dollars, scores landmark green trade

Royal Bank of Scotland Group took advantage of the strong appetite for senior debt in dollars this week, issuing $1.6bn of funding across two tranches. The deal, which included the first dollar issuance of green UK bank paper, offered no premium to investors.

20 May 2020
Belgium returns to dollars as AIIB and NWB ready SRI bonds

Belgium took advantage of more attractive funding conditions in dollars versus euros and strong demand at the 10 year point of the curve to sell its first dollar bond since 2017 on Tuesday. SSA supply in dollars will continue on Wednesday with the Asian Infrastructure Investment Bank and Nederlandse Waterschapsbank bringing socially responsible deals.

19 May 2020
Kommuninvest gets big demand for kroner green bond

With the demand for green loans from its members increasing, Kommuninvest printed its tenth green transaction this week, raising Skr5bn ($520m). Despite the increased demand for green loans, Kommuninvest is yet to proceed with its euro green debut.

19 May 2020
Investors demand more ESG as money pours in

Investors are clamouring for more environmental, sustainable and governance (ESG) themed bonds, as the panic of the last few months gives way to a renewed interest in the format.

19 May 2020
SSA secondary pricing update: UK 10 year trades tighter after £82bn book

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, May 18. The source for secondary trading levels is ICE Data Services.

19 May 2020
Unédic Covid-19 social bond raises €4bn

Unédic, the French agency responsible for French unemployment support, entered the social bond market on a permanent basis on Friday, launching its new social bond framework under which all its debt will be issued from now on. It christened the new programme with its largest bond in 10 years.

15 May 2020
Bank of America prints debut Covid-19 bond

Bank of America became the first global commercial bank to print a Covid-19 response bond this week.

15 May 2020
European banks ready Covid-19 senior bonds

European banks are set to follow sovereign and supranational institutions and begin issuing senior bonds dedicated to fighting Covid-19 under existing ESG frameworks.

14 May 2020
World Bank unveils inaugural sustainable bond impact report

The World Bank has published what it describes as its first impact report covering all of the bonds it has issued and its entire development portfolio.

14 May 2020
Unédic and NRW.Bank plot debut social bonds

Unédic and NRW.Bank are planning to issue their first ever social bonds. The proceeds of Unédic's bond will go towards providing support for the French state unemployment package.

14 May 2020
IG corporate demand holds strong through supply deluge

High grade corporate bond investors showed few signs of fatigue on Wednesday, as deals commanded comfortable oversubscription, despite the flurry of issues in recent days.

13 May 2020
EIB brings sustainability framework to Aussie dollars

The European Investment Bank inaugurated its sustainability awareness bond (SAB) framework in Australian dollars on Tuesday, while on Wednesday NRW.Bank printed the largest SSA Kangaroo so far this year.

13 May 2020
Banks consider green bonds as investors look for diversification

Banks are spying new opportunities with green and social bond funding, with the asset classes having outperformed in the credit markets during the coronavirus crisis.

13 May 2020
Social bonds: Japan leads from the front

The market for bonds that target environmental, social and governance (ESG) concerns previously put the focus on the environmental aspect, leading to a rush of green bond issuance but little attention on social problems. Not anymore. Social bonds have become a much more prominent tool for highly-rated issuers, helping fund solutions to problems ranging from educational shortfalls in developing countries to the spread of Covid-19 around the world. Japanese issuers have been at the forefront, developing a busy domestic market. GlobalCapital talks to a group of prominent issuers about the potential of social bonds.

12 May 2020
Japanese investors nurture domestic SRI market

Japan’s socially responsible investment (SRI) market has blossomed, helping the country to become a leading destination for the sector. Morgan Davis reports.

12 May 2020
SSA secondary pricing update: World Bank 10 year tighter but Germany marginally widens

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, May 11. The source for secondary trading levels is ICE Data Services.

12 May 2020
UCI doubles Europe's green securitization universe

Portuguese mortgage lender UCI doubled the universe of European green securitization issuers when it privately placed its RMBS Green Belém No 1, a deal backed by Portuguese mortgages, at the end of April. The deal had originally been slated for public debut before the coronavirus crisis hit, but was pre-placed in private following March’s market chaos.

12 May 2020
Asia turns to SRI bonds for pandemic help

As Asian countries slowly pick up the pieces from the aftermath of Covid-19, the bond market has emerged as an important source of funding. When the dust settles, its use for more socially responsible investment (SRI) bonds is only set to rise, writes Morgan Davis.

12 May 2020
CS underlines favourable market conditions with uncommon trades

Credit Suisse has become the first Swiss bank to issue a green bond in the euro market, and has also marketed a rare floating rate note. The trades were testament to improving market conditions and the ability for strong names to sell less common products.

12 May 2020
Axiata raises $800m from sustainability-linked loan

Malaysian telecommunications company Axiata has raised $800m from an Islamic sustainability-linked loan.

12 May 2020
Eurofima mandates for 10 year green as ESM wraps up second quarter funding

Eurofima, the supranational institution that finances European rolling stock, is planning to bring a euro green bond with a 10 year maturity. The European Stability Mechanism kicked off the euro supranational bond market this week with a €1.5bn tap on Monday to complete its benchmark funding needs for the quarter.

11 May 2020
AIIB preps sustainable development bond to fund Covid-19 response

Asian Infrastructure Investment Bank is preparing to issue a global sustainable development bond as early as next week to finance its newly created Crisis Recovery Facility aimed at mitigating the economic impact of the coronavirus pandemic.

11 May 2020
Covid cuts flow of green bonds and loans, but not their appeal

Green and sustainable bond and loan financing by companies has slowed as many firms have had to deal with urgent funding needs amid the coronavirus crisis. But three companies crowded into the bond market with green deals on Wednesday, achieving blowout demand — confirming that both issuers and investors remain keenly focused on green finance. Jon Hay and Mariam Meskin report.

06 May 2020
People moves in brief

Morgan Stanley Investment Management makes two SRI hires — Citi appoints Aby for CEEMEA markets — Callaghan joins HSBC for UK M&A

06 May 2020
Banks find value in pref senior for funding mix

Issuance in the financial institutions bond market had a preferred senior flavour this week, with issuers finding this the most cost-effective funding compared with other asset classes. In addition, some of them can use it to fulfil regulatory requirements.

06 May 2020
World Bank hits screens for 10 year dollar SDB

World Bank has picked banks for a 10 year dollar benchmark — the first in the SSA market since October 2019. The bond is a sustainable development bond, focusing on the health and well-being UN Sustainable Development Goal.

06 May 2020
Ico gets big reception as ESM posts RFP

Instituto de Crédito Oficial (Ico) was almost seven times covered for its four year Covid-19 social bond on Wednesday, as investors continue to support deals to tackle the pandemic. The European Stability Mechanism could follow with a similar maturity next week, after it sent banks a request for proposals (RFP).

06 May 2020
Swisscom blasts 30bp through curve on triple green bond day

On a busy day for corporate bond issues, with prestigious competing deals including from Nestlé, Swisscom is nevertheless hogging attention with its debut green bond, which comes alongside another green debut, for power networks group Eurogrid.

06 May 2020
SBAB makes 30bp spread move on euro green debut

SBAB Bank found plenty of room to tighten the pricing on a new preferred senior deal in euros on Wednesday, after investors welcomed the trade’s green credentials.

06 May 2020