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.
A leaked updated draft of the EU Taxonomy delegated act contains looser eligibility criteria that would be applicable to a wider range of buildings, but it could still exclude green bonds under several existing frameworks and has been deemed inconsistent and still overly restrictive.
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.
The Association of German Pfandbrief Banks (vdp) has established minimum standards for Social Pfandbriefe, which build on existing green and social standards, and proponents hope they will encourage standardisation and provide impetus to the sector.
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.
The Energy Efficient Mortgage Label will be launched on 12 February, offering a platform for lenders to provide data and transparency around green products and providing a “bridge” towards a greener market and potentially higher Taxonomy standards, according to the EMF-ECBC’s Luca Bertalot.
Caffil is posting levels for social bonds in private placement format, in what is understood to be a first for a covered bond issuer, with its funding team citing investor interest in such product, which it hopes will add “dynamism” to its MTN issuance at the long end of the curve.
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