EIB issues EUR 600m Climate Awareness Bond

The European Investment Bank (EIB), the EU Bank owned by the EU Member States, rated Moody’s Aaa, Standard and Poor’s AAA, and Fitch AAA, issued a new €600 million (US$677.6 million) Climate Awareness Bond (CAB).

The issue carries an annual coupon of 0.5%, has a final maturity date of 15 November 2023 and has been priced in line with the existing EIB ECoop curve at MS-24bp.

The transaction completes EIB’s EUR Green Bond curve with a third reference point in an intermediate maturity and takes the total CAB issuance to €10 billion. These two achievements reaffirm EIB’s developmental role and its commitment to spur further sustainable growth of the Green Bond market. These are important objectives of EIB’s activity in the run-up to the UNFCCC Paris Climate Conference in December 2015, and are reflected in the Bank’s Corporate Operational Plan 2015-2017.

Like the other two EUR CABs outstanding, the new issue has been awarded a Sustainability Bond Rating of ‘b+’ from oekom, one of the leading ESG rating agencies worldwide. This is the highest rating so far assigned by this agency to any Green Bond.

The bond is EIB’s third CAB distributed in mini-benchmark / ECoop format, which foresees a size of at least €500 million and €250 million minimum re-openings upon actual demand. The €3 billion ECoop CAB due 11/2019 is currently the largest Green Bond outstanding, while the €1.25 billion CAB due 2026 is the longest outstanding Green benchmark in the market.

The bond generated strong demand from a range of investors genuinely interested in the socially responsible features of the transaction (e.g. BMO Global Asset Management, Actiam, etc.), particularly from the Netherlands which accounted for 27% of distribution. Asset managers, insurance companies provided over 37% of distribution by investor type while banks and central banks / official institutions accounted for 58% and 5% respectively.