The only Fitch-rated covered bonds for which any ESG factor is positively credit-relevant are those of Aegon Bank and Panama’s Banco La Hipotecaria, according to the rating agency, which is disclosing “ESG relevancy scores” for credit ratings in a bid to increase transparency but found little impact across the asset class.
La Banque Postale inaugurated a green, social and sustainability bond framework last week and attracted twice as many investors to the EUR750m 10 year green senior non-preferred bond than its last conventional SNP. Issuance in social and covered bond formats is set to follow.
Italy’s UBI Banca is holding a non-deal roadshow for a new sustainable bond framework next week, with Norway’s DNB also planning a new, non-covered green bond programme for 2019 and Austria’s RLB Oberösterreich considering such issuance.
Korea Housing Finance Corporation issued the first green or social covered bond from Asia and the first Korean euro covered bond on Wednesday, a EUR500m no-grow five year social issue that attracted EUR1.5bn of demand achieved the issuer’s goal of diversifying into European and SRI investors.
Australia’s Westpac Banking Corporation will on Thursday begin a roadshow ahead of a planned debut euro green bond, while compatriot QBE will follow up its first green bond from the insurance sector with a gender equality US dollar AT1 deal.
The European Green Securities Steering Committee – an industry-wide committee jointly convened by the Climate Bonds Initiative and the European Covered Bond Council, with the support of the UNEP Inquiry – mapped its priorities for the coming 12 months at an inaugural meeting last Thursday (29 June).
Kommunalkredit Austria expects most of its future covered bond issuance to be green or socially-orientated, according to an official at the bank, after it returned to the wholesale markets for the first time since its privatisation with an inaugural Eu300m social covered bond yesterday (Tuesday).
Kommunalkredit Austria is preparing to return to the covered bond market after a three year absence with a social public sector covered bond, announcing its move the same day Social Bond Principles were unveiled by ICMA as the sector reaches what one banker said is a tipping point.
Kutxabank successfully sold a Eu1bn 10 year social cédulas hipotecarias yesterday (Monday), the first SRI covered bond from Spain, but an official at the issuer said that it had to take into account investor feedback and offer a substantial premium to ensure it could meet its goals.
MünchenerHyp issued the first sustainable covered bond today (Wednesday), a Eu300m five year deal that tapped into growing interest in SRI bonds and which the issuer’s head of treasury and an investor who participated in the transaction said will hopefully be the first of many.