EU gets €135bn orders for €12bn green bond

Johannes Hahn

The European Commission has sold the first NextGenerationEU green bond, raising €12 billion to be used exclusively for green and sustainable investments across the EU.

The final order book was over €135 billion, which meant the bond was over 11 times oversubscribed.

NextGenerationEU is a temporary recovery instrument of more than €800 billion to support Europe’s recovery from the coronavirus pandemic.

“This represents the world’s largest green bond issuance ever,” said the Commission.

“With NextGenerationEU green bonds, the EU is set to become the world’s largest green bond issuer by far, providing a significant boost to sustainable finance markets as well as funding a greener EU recovery from the pandemic.

“With the strong oversubscription rate and excellent pricing conditions today’s issuance represents a promising start to the NextGenerationEU green bond programme of up to €250 billion by end-2026.

“The 15-year bond due on 4 February 2037 was more than 11 times oversubscribed, with books exceeding €135 billion.

“A wide range of investors expressed interest in the bond.”

The 15-year bond carries a coupon of 0.40% and came at a re-offer yield of 0.453%.

This Commission said the bond sale marks the largest green bond order book ever in global capital markets, and the largest green bond ever issued.

The joint lead managers of the transaction were Bank of America Securities Europe S.A., Credit Agricole Corporate and Investment Bank S.A., Deutsche Bank AG, Nomura Financial Products Europe GmbH, TD Securities.

Co-leads were Danske Bank A/S, Intesa Sanpaolo S.p.A. and Banco Santander S.A.

Commissioner in charge of Budget and Administration, Johannes Hahn, said: “Today’s issuance is a strong start for the NextGenerationEU green bond programme.

“Set to turn the EU into the world’s biggest green bond issuer, it is a powerful signal of the EU’s commitment to sustainability.

“Our future is green and it is extremely important that we seize the opportunity to clearly show to investors that their funds will be used to finance a sustainable European recovery.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.