Berlin Hyp became the first bank to sell a sustainability-linked bond (SLB) yesterday (Tuesday), issuing a €500m 10 year senior preferred bond with a coupon step-up should it not hit a carbon reduction target, in a “courageous” move that met with dedicated investor interest and achieved tight pricing.
Berlin Hyp is set to become the first bank to launch a sustainability-linked bond next week, a 10 year senior preferred issue tied to a sustainability performance target of a 40% reduction in the carbon intensity of buildings financed by its loan portfolio.
OP Mortgage Bank issued the first Finnish green covered bond yesterday (Thursday), a €750m deal with proceeds earmarked for energy efficient buildings that achieved a peak €1.6bn-plus book and the tightest 10 year spread since May 2019 – “a great outcome,” according to head of funding Tom Alanen.
Hypo Tirol launched the first Austrian euro benchmark covered bond in social format last week, a €500m 10 year deal that the bank’s head of treasury deemed its “best ever”, as it achieved its biggest book and tightest spread while supporting affordable housing in the region. Green bonds are next on its agenda.
Crédit Agricole Italia sold the first Italian green covered bond on Monday, a €500m 12 year deal that achieved the tightest pricing of any Italian covered bond, and its head of financial management said the debut delivered on the French group’s ESG strategy and commitment to investors.
MünchenerHyp issued its first senior green bond on Wednesday, a €500m eight year deal that is also its first senior non-preferred euro benchmark, with the German bank moving to take advantage of persistent demand in credit markets at higher yields in spite of elevated rates volatility.
Deutsche Kreditbank (DKB) will in future only tap the bond markets in green and social format, after having sold the first deal compliant with the latest draft of the EU Taxonomy and Green Bond Standard, a €500m five year that is also the first senior preferred bank bond issued at a negative yield.
Berlin Hyp achieved the highest bid-to-cover ratio of any German Pfandbrief this year on Tuesday when it reopened the post-summer covered bond market with its 10th benchmark green bond, a €500m 10 year deal launched in the wake of “ambitious” new sustainability targets, and followed it up with a Swiss franc debut on Thursday.
De Volksbank issued the first green Tier 2 issue from a European bank on 15 July, a €500m 10.25 non-call 5.25 transaction that was almost four times oversubscribed and priced through fair value, as the issuer aligns its funding with its strategy of being climate-neutral by 2030.
Sparebanken Vest Boligkreditt’s “360 degree” sustainability strategy was cited as helping attract investors to the Norwegian’s €500m seven year debut green covered bond on Wednesday (1 July), which was priced with a lower new issue premium than recent supply in the asset class.
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