Sustainable covered bond pioneer MünchenerHyp is working on a distinct green bond framework to accompany its prior social framework, in a move driven by investor preferences. Proponents have meanwhile denied a claim green bonds are a “lose-lose”, pointing to new issuer-investor benefits.
Green covered bond issuance looks set for significant growth thanks to regulatory measures, increasing investor interest and banks’ efforts to improve the identification of green assets and determination to finance such assets, according to S&P, with initiatives such as EeMAP deemed supportive.
Landesbank Baden-Württemberg reached an unusually broad, international investor base with its inaugural green Pfandbrief on Monday, a EUR500m five year benchmark that received an “overwhelming” response, generating pricing power, according to the German issuer, which is also working on a social programme.
LBBW is set to issue its first green Pfandbrief in the coming days in a move partly aimed at attracting sustainable investors into covered bonds with a tapering and end to the ECB’s asset purchases on the horizon following announcements yesterday (Thursday) afternoon from the central bank.
DNB Boligkreditt has established a green covered bond framework based on residential mortgages for the most energy efficient properties in Norway, after compatriot SpareBank 1 Boligkreditt tightened its criteria on the basis of feedback during its Climate Bonds Initiative certification process.
Ahead of 150th birthday celebrations on 8 May marked by a gift of saplings to its home city, Berlin Hyp tightened its pioneering green bond framework and revealed an increasing positive environmental impact from the programme.
Caja Rural de Navarra achieved the highest oversubscription ratio of any euro benchmark covered bond this year with a EUR500m seven year sustainable cédulas on Wednesday, boosted by positive sentiment towards Spain, while the issuer highlighted EeMAP and SDG-inspired enhancements to its programme.
Landshypotek Bank is preparing to issue the first green covered bond from Sweden, a Swedish krona debut set to be backed by and finance forestry loans, thereby targeting “a very important part” of tackling CO2 emissions, its chief sustainability officer told Sustainabonds.
Caffil looks set to become the first French issuer of a green or social covered bond, as it plans to this year issue a social bond backed by the public sector assets it refinances with an initial focus on healthcare, and to later enter the green bond market, officials at the issuer told Sustainabonds.
The use of renewable energy assets as covered bond collateral under a proposed Luxembourg framework would bring extra risks versus traditional collateral, according to Moody’s, but the rating agency highlights various mitigants and says the law is overall credit positive for funding such assets.