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Industry roundup: 18 March

Deutsche Bank issues second green bond

Deutsche Bank has successfully placed its second green bond, raising US$800m. The senior preferred bond has a tenor of five years and a coupon of 1.686%. The issue attracted total demand from investors of US$2.9bn, with final demand of US2.1bn after the bank tightened pricing by more than 20 basis points.

This issuance enables Deutsche Bank to establish a pricing point in the US dollar senior preferred debt market. It marks the bank’s first senior-preferred green bond for the US market and responds to rising demand from the bank’s US investors for ESG assets.

The proceeds will be used to further Deutsche Bank’s sustainability strategy by financing clients’ projects, including the development of energy efficient commercial real estate. The issue contributes to multiple UN Sustainable Development Goals and the bank says demonstrates its ability to build up a reliable pipeline of eligible assets. Deutsche Bank aims to take further opportunities to refinance green assets going forward.

"This issuance underlines our commitment to sustainable financing and enables us to continue to deliver on our targets," explained Dixit Joshi, the bank's group treasurer. Green financing is now an integral part of Deutsche Bank’s funding strategy.”

The bond was issued under Deutsche Bank's Green Financing Framework. This is aligned to the International Capital Market Association (ICMA) Green Bond Principles and to Deutsche Bank’s overall Sustainable Finance Framework, which identifies activities contributing to the bank’s sustainable finance target. The bank’s Green Financing Framework takes account of the recommendations for technical screening criteria of the Technical Expert Group for the EU Taxonomy.


Modifi announces US$60m debt facility with Silicon Valley Bank 

Digital trade finance fintech Modifi has announced a new US$60m debt facility with Silicon Valley Bank (SVB), bringing its total raised capital to US$111m. The facility from SVB's German Branch will be used to address increasing demand in existing markets, as well as fuel Modifi's continuing growth and finance buyers and sellers in new geographies, particularly the US.

Modifi says that expansion into the US, paired with the existing coverage, will establish it as the only digital trade finance platform focused on SMEs that spans the three major trading regions of Europe, Asia and North America - a cluster which encompasses approximately 80% of global imports and exports respectively.

Small and medium-sized businesses are turned down in 50% of cases when requesting trade finance, which has resulted in a US$1.5 trillion annual funding gap. The pandemic has only exacerbated the situation as risk appetite decreased globally. Modifi says it is empowering SMEs to trade internationally and grow, thus benefiting local economies.

The fintech says it tripled its business in 2020 as a result of a strong performance during the pandemic. The increase in demand for digital cash management solutions allowed the company to expand to four new markets in 2020, launching in China, Hong Kong, the UAE and Spain. The trend has continued in 2021 with Modifi's launch in the Netherlands. The company currently operates out of seven offices in Berlin, Amsterdam, Delhi, Mumbai, Shenzhen, Hong Kong and Dubai.


Nordea introduces guaranteed lending solutions with the European Investment Fund

Nordea is to introduce a new range of guaranteed lending solutions to SMEs in Finland, Sweden and Denmark together with the European Investment Fund under its new guarantee programme, the European Guarantee Fund (EGF).

An agreement signed by the bank and the fund will provide Nordea with €700m in guarantee capacity for 2021. The guarantee programme enables Nordea to offer €1bn billion of new financing to its customers on what the bank describes as more favourable terms.

The European Guarantee Fund was recently founded by the European Investment Bank Group (comprising the EIB and the EIF) to ensure that SMEs in EU member states with sustainable business plans are provided with liquidity to overcome COVID-19-related adversities and that healthy businesses are supported to grow. The European Guarantee Fund programme supplements Nordea’s lending capacity as well as lending solutions for SMEs.

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