Berlin Hyp became the first bank to issue a sustainability-linked bond (SLB) on Tuesday, 13 April, with a €500m 10 year senior preferred deal. Bodo Winkler-Viti, Berlin Hyp’s head of funding and investor relations, discussed with Sustainabonds’ Neil Day the pioneering first issue, the rationale for adopting the new instrument and the bank’s choice of metrics, and how SLBs fit in with its green bond issuance.
Berlin Hyp became the first bank to sell a sustainability-linked bond (SLB) yesterday (Tuesday), issuing a €500m 10 year senior preferred bond with a coupon step-up should it not hit a carbon reduction target, in a “courageous” move that met with dedicated investor interest and achieved tight pricing.
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.
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.
Deutsche Bank entered the green bond market on Tuesday as part of a push towards a recently-announced €200bn sustainability target, with a €500m six year non-call five senior preferred deal that achieved a €4.5bn-plus book and pricing inside fair value, global head of issuance and securitisation Jonathan Blake told Sustainabonds.
Berlin Hyp has opened up its green bond issuance to private placements ahead of the fifth anniversary of the launch of its pioneering green Pfandbrief today (Monday), with the German issuer having hit one year ahead of schedule a target of 20% of its lending being green by the end of 2020.
Berlin Hyp issued its first green bond in senior preferred format and eighth overall on Monday, a €500m no-grow 10 year deal that attracted more than €1.2bn of demand, and head of funding and IR Bodo Winkler said the issuer had reached the point where its issuance was almost “self-explanatory”.
SpareBank 1 SMN inaugurated its green bond framework on 4 September with a EUR500m seven year senior preferred issue soon after it received an improved ESG rating from Sustainalytics, with its fisheries-related element welcomed by the Marine Stewardship Council.
ABN AMRO priced its fourth green bond last Monday, a EUR750m no-grow seven year deal where green investors proved less price sensitive in a hot market, on the same day the Dutch State Treasury Agency announced plans for the Netherlands to issue the first triple-A green sovereign bond.
Demand from international and ESG-related investors boosted demand for a EUR500m five year senior preferred green bond debut from UBI Banca on Wednesday, as the Italian bank took the opportunity to showcase the activities encompassed in its green, social and sustainable framework.