The European Investment Bank (EIB) has issued a ¥5 billion ($49.3m) Climate Awareness Bond (CAB), believed to be the first ever green bond in 'Samurai' format.
A Samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese issuer.
The bond matures in 25 years but can be redeemed from 2024. It has a coupon of 3% during the first year, after which time it will be linked to the JPY/AUD foreign exchange rate.
The bond was placed with Japanese corporate and institutional investors. The lead manager for the transaction was Daiwa Securities. The EIB, which plans to direct over a quarter of its finances to climate action in 2014, will use the proceeds of the bond to increase lending to renewable energy and efficiency initiatives.
Last year EIB lent €19 billion to similar projects, with €6.4 billion spent on renewable energy alone.
Eila Kreivi, director and head of capital markets at the EIB, said: "[T]he EIB responded to demand from Japanese corporate and institutional investors with a socially responsible focus. This year, Climate Awareness Bonds have already raised a record €1.6 billion equivalent in five currencies – a testimony to the depth and diversity of the investor base in this space."
Carlos Perezgrovas, executive director SSA origination, at Daiwa Capital Markets Europe, said the issue was the first Socially Responsible Investment (SRI) bond in the Samurai market.
"Renewed interest from institutional investors for structured notes, together with greater awareness of SRI bonds, is allowing this young asset class to expand into the Japanese domestic market," he said.
Peter Cripps