EnBW issues first green hybrid bonds
by Ben Poole
German energy supplier EnBW has successfully launched its first two green hybrid bonds on the capital markets with a total issue size of €1bn. This makes EnBW the first German green hybrid bond issuer. Rating agencies Moody’s, Standard & Poor’s and Fitch classify 50% of each of the hybrid bonds as equity for EnBW. The proceeds from the Green bonds are earmarked for expanding offshore and onshore wind power and photovoltaics - solar power.
A syndicate of banks comprised BNP Paribas and Deutsche Bank as Joint Global Coordinators and Joint Structuring Advisors as well as Barclays, BayernLB, Citi, HSBC and Morgan Stanley as Joint Lead Managers.
EnBW is the first company to launch bonds under the new EU Prospectus Regulation of 21 July 2019. The two bonds, each with an issue size of €500 million and a settlement date on 5 August 2019 will mature in some 60 years. For the bond issue with an initial coupon of 1.125 %, EnBW has a right of early redemption that it can first exercise on 5 August 2024 and thereafter at any coupon date. The bond issue with an initial coupon of 1.625 % can first be redeemed on 5 May 2027. The bonds are subordinate to all other financial liabilities and rank equally with EnBW’s out-standing hybrid bonds.
EnBW is represented in expert bodies such as the Task Force on Climate-related Financial Disclosures (TCFD) - an initiative of the Financial Stability Board - the European Commission Technical Expert Group (TEG) and the German government’s Sustainable Finance Advisory Council. Outcomes from these bodies are successively incorporated into the company’s own activities. EnBW’s green hybrid bonds are therefore already based on the current draft model of the EU Green Bond Standard.
ISS-oekom, a rating agency internationally specialising in sustainability, confirmed that the EnBW bonds comply with the Green Bond Principles. Moreover, ISS-oekom has verified the good sustainability quality of the bonds issued as well as EnBW’s good sustainability performance.
In addition, EnBW’s green hybrid bonds are certified to the high standards of the Climate Bonds Initiative (CBI). These feature detailed sector-specific criteria for qualification as green bonds.
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