China Development Bank issues its first international green bond
China Development Bank (CDB) has made its debut in the international green bond market, raising $1.67 billion.
The bond, which consists of two tranches – one dollar-dominated and one euro-dominated – holds a CBI certification and follows the Chinese domestic green guidelines.
The proceeds will be used to finance green projects in water resources management, renewable energy and clean transportation along the Belt & Road initiative.
The transaction will be listed on the Hong Kong Stock Exchange and the China Europe International Exchange.
CDB's €1 billion ($1.175 billion) tranche has a four-year maturity, and was priced at MS+43bps with a coupon rate of 0.375%. Joint lead managers and joint bookrunners for the tranche were Bank of Communications, CCB Europe, Commerzbank, Crédit Agricole CIB, Deutsche Bank, HSBC, ING and SEB.
The US dollar tranche has a value of $500 million, a five-year maturity, and was priced at 78bps above Treasuries, with a coupon rate of 2.750%. Joint lead managers and joint bookrunners were Agricultural Bank of China Limited Hong Kong Branch, Bank of China (Hong Kong), BNP Paribas, China Construction Bank (Asia), Commonwealth Bank of Australia, Crédit Agricole CIB, Deutsche Bank and Standard Chartered Bank.
Both tranches attracted strong interest from international investors.
The bonds representing China's first ever quasi-sovereign international green bond, "demonstrates the Chinese government commitment towards a more environmentally responsible and green society", according to CDB.
France's AFD meets strong demand for its second green bond
L'Agence Française de Développement (AFD) has issued its second green bond to finance climate change mitigation and adaptation projects. The six-year, €750 million ($874 million) issue carries a coupon of 0.125% and met with strong demand from more than 100 investors.
From initial pricing thoughts of 30 basis points over the interpolated government bond rate, the deal eventually priced at a spread of 24 basis points, after the order book reached €2.9 billion. This was one of the largest order books ever achieved by AFD on a euro benchmark issue, the agency said.
A quarter of investors were based in France with 19% coming from Germany and Austria, 17% from Asia, 15% the Benelux countries and 11% from the UK. Asset managers bought 34% of the issue, with central banks and official institutions taking 30%, insurance companies and pensions funds 21% and banks 13%.
The bookrunners involved in the transaction were Société Générale CIB, Natixis, HSBC and Crédit Agricole CIB. The bond has been rated AA by S&P and Fitch and received a 'medium green' rating from the second opinion provider Cicero.
AFD's first green bond was a 10-year €1 billion issue launched in September 2014.
Manulife prepares green bond framework
Canadian insurance group Manulife has published a framework outlining its strategy to raise funds from green bonds to invest in a range of sustainable assets.
The company said it would use the proceeds of any such bonds, within 18 months of issuance, to finance or re-finance, new and/or existing green assets in the following categories:
- renewable energy;
- green buildings;
- sustainable management of natural resources and land use;
- energy efficiency;
- clean transport;
- sustainable water management; and
- pollution prevention and control.
"Manulife believes that investments in renewable energy, energy-efficient buildings, sustainably-managed forestry and other long-duration assets provide a good economic fit for our long-dated insurance liabilities, some of which continue for over 20 years," the insurer said.
As part of the evaluation and selection process for investing the proceeds, the insurer has established a green bond council that includes chief financial officer Stephen Roder and chief investment officer Warren Thompson.
The framework has been reviewed by the research and ratings firm Sustainalytics which said it is confident "that the Manulife green bond framework is robust, transparent, and in alignment with the four pillars of the Green Bond Principles 2017."
ADB taps green kangaroo bond
The African Development Bank, has tapped a green 'kangaroo bond' first issued in 2016.
It raised an additional A$60 million, bringing the amount raised to A$115 million.
The issue has a 14-year maturity and a coupon of 3.5%. The tap was rated 'Aaa', 'AAA' and 'AAA' by Moody's, Fitch and S&P Global respectively, with Nomura acting as sole lead manager.
The re-offer price of the tap was 100.747% and the proceeds will be used to finance the following projects:
-Greenfield renewable energy generation
-Demand-side brownfield and greenfield energy efficiency
-Vehicle energy efficiency fleet retrofit or urban transport modal change
-Biosphere conversation projects
-Solid waste management
-Industrial processes
-Fugitive emissions and carbon capture
-Urban development
-Water supply and access.
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