Crédit Agricole CIB has announced the issuance of a €100m transition bond, as a private placement subscribed by AXA IM, on behalf of AXA Group. Listed on the Luxembourg Stock Exchange, the bond has a 10 year maturity and will pay a coupon of 0.55%.
An amount equivalent to the proceeds of the transition bond will be earmarked by Crédit Agricole CIB to a selection of loans made to projects in carbon intensive sectors which contribute to the transition to a low carbon economy, such as LNG-powered ships, investments in energy efficient industries as well as gas power assets in countries where power generation currently relies on coal. The underlying projects are estimated to abate carbon emissions by a total amount of 26,500 tCO2 annually.
This first transition bond issued by a commercial bank will allow AXA Group to contribute to the financing of climate transition assets, while benefiting from Crédit Agricole credit strengths and global origination network. Following a call for action from AXA IM in June, it also represents a milestone in the development of transition bonds, a sustainable finance tool designed to accompany the transition to a low carbon economy for greenhouse gas intensive sectors.
Crédit Agricole says it remains highly committed to the growth of the sustainable debt finance market in general, at the service of its clients. This transition bond issuance, in cooperation with AXA Group, is a further step in that strategy.
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