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.
Berlin Hyp took what could be a last chance to secure prevailing attractive funding levels with a EUR500m 10 year green senior unsecured bond on Tuesday, but an allocation of just 20% to SRI accounts disappointed, as the deal’s maturity and spread wasn’t for all in a difficult market.
A debut EUR500m green Pfandbrief for Deutsche Hypo went “perfectly” yesterday (Thursday), according to head of funding and investor relations Jürgen Klebe, who said the deal reflected green moves in the bank and helps prepare for a post-CBPP3 market, with annual issuance planned.
Deutsche Hypo will next month become only the second issuer of a green benchmark covered bond, after having today (Wednesday) announced a roadshow ahead of a debut backed by commercial real estate, in a boost to the sustainable covered bond segment, which has lagged other asset classes.
Berlin Hyp issued a EUR500m 10 year senior green bond yesterday (Tuesday), thereby becoming the bank with the most green benchmarks outstanding, and for the first time it sold the majority of a benchmark issue to non-German accounts, with its green commitment cited as a factor in investors’ support.
Berlin Hyp is planning its second senior green bond, a long dated euro issue expected after a roadshow starting Friday, which would make it the most prolific issuer of green benchmarks. The mandate comes after oekom upgraded the bank’s sustainability corporate rating to put it top of its peer group.
Deutsche Kreditbank head of treasury Thomas Pönisch attributed impressive pricing on its second green bond on Tuesday to the “green factor”, while the German lender extended its commitment to the market with a longer oekom agreement and a larger pool that could see a private placement follow.
Berlin Hyp sold a higher share of a Eu500m long six year green Pfandbrief to foreign accounts than on any of its previous benchmark covered bonds, according to head of investor relations and sales Bodo Winkler, while adding accounts new to the credit and achieving tight pricing.
Berlin Hyp sold the first green covered bond today (Monday), attracting almost Eu2bn of orders for a Eu500m seven year issue, with bankers suggesting the deal printed in line with where a conventional Pfandbrief would have priced while attracting new investors to the paper.
Six years after the germination of the idea, the first Green Pfandbrief is coming to fruition thanks to careful nurturing by Berlin Hyp and its partners. Here, they discuss the credentials and potential of an investment that promises to be sustainable in more than one sense of the word.