SpareBank 1 Bolgikreditt launched the largest single-tranche green bank bond outside China and the first green benchmark covered bond with residential mortgages on Tuesday, a EUR1bn deal made possible by taking building codes and years as a proxy for energy efficiency – a strategy that could be used by others.
SpareBank 1 Boligkreditt is preparing to issue an inaugural, euro benchmark green covered bond – the first from outside Germany – targeting the growing SRI investor base and aiming to highlight and enhance its member banks’ commitment to sustainability, SpaBol’s Eivind Hegelstad told Sustainabonds.
A world-first green covered bond law has been proposed by Luxembourg’s ministry of finance, with the draft bill defining a new product to finance renewable energy infrastructure. The move is just the latest green finance initiative in the country – whose covered bond market has meanwhile been in decline.
Lower capital requirements for green assets could be credit negative for banks, according to Moody’s, because they could lead to “real risks” being underestimated, but the EMF-ECBC’s Luca Bertalot argues that the industry could satisfy an evidence-based European Commission approach.
A first offshore public benchmark Climate Bond for Westpac on 16 November allowed the issuer to access the more mature European SRI investor base, according to a funding official at the Australian bank, after it emphasised its sustainability track record on a roadshow for the EUR500m seven year green bond.
The European Commission is “looking positively” at reducing capital charges to boost green loans such as energy efficient mortgages, Valdis Dombrovskis said today (Tuesday). A draft definition for such loans is due in February ahead of an EeMAP pilot phase that could support such a move.
LBBW sold the largest green bond from a European bank on Tuesday, a Eu750m four year senior unsecured debut at the tightest spread of any German senior benchmark, inaugurating a framework from which it can also issue covered bonds and that incorporates a new asset eligibility methodology.
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.
HSBC Holdings inaugurated a new Sustainable Development Goal (SDG) bond framework on Wednesday that aligns with seven of the UN targets, selling a $1bn six year non-call five HoldCo deal.
Westpac sold its first offshore Climate Bond yesterday (Thursday), a EUR500m seven year senior unsecured deal, and its green status was deemed to have aided pricing in a weaker market and versus recent comparable Australian supply.
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