German energy company EnBW has launched its first two green hybrid bonds on the capital markets with a total issue size of €1bn for funding renewable energy projects.
Rating agencies Moody’s, Standard & Poor’s and Fitch classify 50% of each of the hybrid bonds as equity for EnBW.
The energy company launched its first green bond with an issue size of €500m on 24 October 2018.
The proceeds from the two new hybrid bond issues are earmarked for expanding offshore and onshore wind power and photovoltaics.
EnBW chief financial officer Thomas Kusterer said: “In line with our strategy, we are investing increasingly in climate-friendly growth projects.
“A second issuance of green bonds is therefore a logical next step for us.”
According to Kusterer, the new bonds were several times oversubscribed within a very short time.
“That demonstrates the capital markets’ confidence in us and the recognition of our strategy. The equity component of the hybrid bonds also has a positive impact on our credit profile,” he said.
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 have been incorporated into the company’s own activities and EnBW’s green hybrid bonds are 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.
The syndicate of banks involved in the issue include 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.
The two bonds, each with an issue size of €500 million and a settlement date on 5 August 2019 will mature in about 60 years.