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EIB’s launches its first Climate Awareness Bond transaction of 2013

EIB’s launches its first Climate Awareness Bond transaction of 2013

  •  Release date: 22 April 2013
  •  Reference: 2013-051-EN

Today, the European Investment Bank (‘EIB’) priced its first Climate Awareness Bond (CAB) transaction of 2013, a SEK 500 million tap of the April 2019 line, thus offering a residual maturity of 6 years.

Climate Awareness Bonds raise funds from fixed income investors to support EIB lending for renewable energy and energy efficiency. The EIB is among the largest financiers of projects to tackle climate change, having provided over EUR 13bn worldwide in 2012 alone. Through CABs, investors have the opportunity to contribute to EIB’s Climate Action financing, while enjoying the excellent credit quality of EIB as an issuer.

Today’s transaction was marked by strong interest from Scandinavian investors, taking  almost half the issue, with Asian and other European accounts also providing significant demand. Demand was split between fund managers and bank treasuries.

Investor allocation:

By Geographical Region

By Investor Type

Nordics:                      40%

Banks:                        40%                 

Other Europe:             40%

Fund Managers:          60%

Asia:                           20%

Joint bookrunners for the transaction were Skandinaviska Enskilda Banken AB (publ) (“SEB”) and Bank of America Merrill Lynch.

Comments on the issue:

Bertrand de Mazières, Director General of Finance, at the EIB, said: “EIB’s first Climate Awareness Bond transaction of the year asserted the sustained investor appetite for climate-flavoured products in the SEK market. The EIB reaffirmed its role as a regular issuer in this format, addressing demand from European and Asian investors.”

Christopher Flensborg, Head of Sustainable Products and Product Development at SEB said: “Following the recent strong demand in USD it is nice to see interest in European currencies. Once more EIB managed to attract new investors to the Green Bond market with their climate awareness bonds and there are clear signs of asset managers now joining the asset owners in climate investments.”

Summary Terms and Conditions for the new bond issue:

   

Issue Amount

SEK 500mm to new amount 2.1bn

Pricing Date

19 April 2013

Payment Date

30 April 2013

Maturity Date

23 April 2019

Issue Price

105.625

Coupon

3%

Re-offer Spread

MS +26 bps or SGB 4.25% due 12 March 19 +80bps

Format:

Under the EIB’s Debt Issuance Programme

Listing

Luxembourg

Background information

On Climate Awareness Bonds (CABs)

Proceeds from Climate Awareness Bonds issues used exclusively to finance renewable energy and energy efficiency projects that include:

  • renewable energy projects such as wind, hydro, solar and geothermal energy production; and 
  • energy efficiency projects such as district heating, co-generation, building insulation, energy loss reduction in transmission and distribution and equipment replacement with energy efficiency gains of 20% or more.

Pending disbursement, the proceeds are kept in a separate sub-portfolio of EIB’s treasury and are invested in money market instruments. Since 2007, EIB Climate Awareness Bonds have raised over EUR 1.7bn equivalent.

EIB provides transparency on the Climate Awareness Bonds through its annual reporting and a periodical investor newsletter.

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. The Bank has set a target of EUR 70bn for its 2013  funding programme, an amount similar to the volume ultimately raised in 2012 (EUR 71bn).

Background information on EIB

The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The Bank’s strong credit standing is underpinned by exceptional asset quality, a strong capital base, robust liquidity, firm shareholder support, conservative risk management and a sound funding strategy.

EIB’s shareholders, the EU Member States, approved on 31 December 2012 a fully paid in EUR 10bn capital increase.



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