KBC to roadshow debut green bond, cites Belgian sovereign influence

KBC is preparing to issue an inaugural green bond, in senior unsecured format, with the Belgian group today announcing a roadshow to introduce a new framework under which it can issue both secured and unsecured bonds, building on momentum generated by Belgium’s first green government bond in February.

KBC Group NV announced this (Tuesday) morning that it has mandated ABN AMRO and Crédit Agricole as joint green structuring advisors to arrange a European roadshow, starting on Monday, to present its new green bond framework. A euro-denominated senior unsecured transaction will follow, subject to market conditions.

The deal, set to be the first benchmark green bond from a Belgian bank, will follow the Belgian government’s first green bond, a EUR4.5bn 15 year deal that attracted more than EUR12.7bn of demand in February.

“KBC is convinced that the financial industry has a key role to play in the transition to a low carbon economy and is willing to contribute to the development of a sustainable financial market,” states the green bond framework. “Backed by the inaugural EUR4.5bn Green OLO issued by the Kingdom of Belgium in February 2018, KBC Group, as a leading financial group in Belgium, is implementing a comprehensive sustainability bond strategy, starting in 2018 with the publication of this inaugural green bond framework, to support the development of the green bond markets in Belgium and Europe.

“Green funding provides an opportunity for KBC to further enhance its ability to finance the green projects of its clients and to mobilise all its stakeholders around this objective.”

Issuing a green bond will also contribute to the diversification of its investor base, said the group.

The framework is aligned with ICMA’s Green Bond Principles (GBP), and KBC said it also intends to align the framework with future best practices or regulatory requirements, such as an eventual European green bond standard proposed by the European Commission.

The proceeds of green bonds issued under the framework will be used to finance or refinance projects and activities in seven categories: renewable energy, energy efficiency, clean transportation, green buildings, pollution prevention & control, water management, and sustainable land use.

The framework is intended to allow for secured and unsecured green issuance in various formats and currencies. Green bonds can be issued under the framework via KBC Group NV, KBC Bank NV, or any of its other subsidiaries.

Sustainalytics has provided a second party opinion on the framework, describing it as being “credible and impactful” and confirming its alignment with the GBPs.

ABN AMRO