Abu Dhabi Future Energy Company PJSC – Masdar has announced the successful completion of its first green bond issuance for US$750m 10-year senior unsecured notes.
There was exceptionally strong appetite from regional and international investors with the orderbook peaking at US$4.2bn, i.e. oversubscription of 5.6x.
Pricing tightened 35bps between launch and final terms, with a final landing spread of 115bps over US Treasuries and a coupon of 4.875%.
Allocation was finalised with a split of 87.5% to international investors and 12.5% to MENA investors.
The debut green bond demonstrates investor confidence in the financial strength of Masdar, which has credit ratings of A2 (Moody’s) and A+ (Fitch), and its strong sustainability credentials.
In line with Masdar’s Green Finance Framework, net proceeds from this bond and future offerings will be used to invest exclusively in “dark green” renewable energy projects, many of which will be in developing economies and climate-vulnerable countries that have a critical need for investment.
This bond is the first part of a programme to raise up to US$3bn of bonds to meet Masdar’s equity funding commitments on new renewable energy projects at home and overseas, as it seeks to grow its global portfolio to 100GW of capacity by 2030.
Proceeds from all bond offerings under the programme will be deployed towards the greenest projects in the renewables sector, namely solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets, and strict ESG criteria will apply to restrict the eligibility of projects.
Chairman of Masdar Sultan Al Jaber said: “It is vital to make finance more available, accessible and affordable for developing economies if we have any chance of meeting climate goals to supercharge sustainable development.
“Ahead of the UAE hosting the UN climate change conference, COP28, we must champion initiatives that advance climate finance and decarbonisation.
“Today, the successful issuance of Masdar green bonds will support these twin aims, by helping to provide funding towards renewable energy projects where they are needed most.”
The bond was rated A2 by Moody’s and A+ by Fitch, in line with the corporate credit ratings of the company, and was priced at a coupon rate of 4.875% with maturity on 25 July 2033.
The issuance was arranged and offered through a syndicate of joint lead managers and bookrunners comprising of BNP Paribas, Citi, First Abu Dhabi Bank, HSBC, SMBC Nikko, Société Générale and Standard Chartered.