On Wednesday 28th June 2017, the European Investment Bank (EIB), owned by the EU Member States and rated Aaa/AAA/AAA (Moody’s / Standard and Poor’s / Fitch), launched a new EUR 1bn Climate Awareness Bond (CAB) 2047. The issue has a final maturity date of 15 November 2047, making it the longest ever green bond. The ultra-long 30-year bond carries an annual coupon of 1.5% and was priced at a final spread of mid swaps plus 5bp, equivalent to a spread at the time of pricing of 36.1bps over the August 2046 German Bund.
EIB announced the intention to issue a new EUR 500 million 30-year CAB on Wednesday, 28th June at 9am CET. Books opened with price guidance in the mid-swaps plus 6bps area. Thanks to attract strong demand from high-quality investors, EIB tightened the price to mid-swaps plus 5bps and increased the deal size to EUR 1 billion during bookbuilding process.
Final orderbooks were in excess of EUR 1.2bn with 48 investors participating in this issue. Banks and intermediaries drove the transaction, accounting for 60 percent of demand complemented by significant interest from asset managers and insurance companies representing 37 percent. Geographically, 99% of the issue was placed with European investors.
While extending the green bond maturities to the ultra-long part of the curve, the transaction draws attention to the celebrations of the 10th anniversary of the Climate Awareness Bonds, the first green bond ever.
The new line, issued on the 60th anniversary of the treaty of Rome and the 10thanniversary of the Berlin Declaration, follows the European Council conclusions on the Paris Agreement on climate change of 22 June 2017, in which “the European Council strongly reaffirms the commitment of the EU and its Member States to swiftly and fully implement the Paris Agreement, to contribute to the fulfilment of the climate finance goals, and to continue to lead in the fight against climate change.” The success of the exercise highlights the strong support of the market to this commitment.
The following investors wished to disclose their participation in the issue:
Barclays, Blackrock, Deutsche Bundesstiftung Umwelt, DekaBank, Donner & Reuschel, NORD/LB, Sparkasse Pforzheim
Compliments of the European Investment Bank