The European Investment Bank (EIB) has priced its first Climate Awareness Bond aligned with the European Green Bond Standard (EuGBS-aligned CAB), with a size of €3 billion and due May 15, 2037.
“The bond, the largest so far issued under this standard, pays an annual coupon of 3.125% and has an issue price of 99.627%, providing a spread of +50.7bps over the DBR 2.500% due 15th February 2035 …” said the EIB.
“The mandate for the transaction was announced on Tuesday 1st of April. Books formally opened the following day with price guidance at mid-swaps +56bps area.
“Mid-morning, on the back of a robust and growing orderbook, the spread was set at mid-swaps +53bps, 3bps inside initial guidance. The final book size was in excess of EUR 40bn (incl. EUR 1.45bn JLM interest).”
With this transaction, the EIB has completed around €35.8 billion equivalent of bond issuance year to date, equating to almost 60% of its €60bn funding program for 2025.
“This Climate Awareness Bond is issued in accordance with Regulation (EU) 2023/2631 (European Green Bond Standard regulation or EuGBS regulation) and uses the designation ‘European Green Bond’ or ‘EuGB’,” added the EIB.
“The transaction is the first executed by a Supranational issuer.
“It takes place under the umbrella of the 2023 CAB Framework, which is also aligned with the Green Bond Principles. As required by the EuGBS regulation, the CAB Framework includes the European Green Bond Factsheet and its external review with positive opinion, which can be accessed here.
“The proceeds will be allocated to disbursements under EIB’s lending to activities targeting the objectives referred to in Regulation (EU) 2020/852 (EU Taxonomy Regulation), with a primary but not exclusive focus on Climate Change Mitigation.
“The issue delivers the results of EIB’s long-standing strategy of gradual alignment with the EuGBS. Building on compliance with the EU Taxonomy Substantial Contribution (SC) criteria in prior CAB issuance, this new issue is based on a set of eligible projects also compliant with Do No Significant Harm (DNSH) criteria and Minimum Safeguards (MS) requirements.
“The assessment was conducted on projects previously allocated with CABs and therefore already assured to be aligned with Substantial Contribution criteria, while adhering to the overall logic of DNSH and MS.
“The new CAB Framework and completion of this first EuGB issue pave the way for further potential EuGBS-aligned issuance. The pace of such issuance relies on the volume of disbursements compliant with all elements of the Taxonomy. This will depend on the extension of the DNSH/MS assessment to other projects and activities, which may be helped by improvements in data availability and usability as well as further clarification of the related verification requirements.
“In line with the Taxonomy Simplification Report of the EU Platform on Sustainable Finance (access the document here), the European Commission’s Omnibus-proposal of 26/02/2025 foresees a systematic and thorough review of DNSH criteria with the aim of improving usability as well as related verification requirements. This initiative may facilitate the uptake and scaling up of EuGBS-aligned issuance going forward.”
EIB President Nadia Calviño said: “Capital markets play a key role in the green transition towards a sustainable economy. As a pioneer of the green bond market, this transaction now brings the EIB’s high standards of quality, transparency and increased scale to the EU’s new European Green Bond Standard.”
EIB DG of Finance Cyril Rousseau said: “The strong reception for this inaugural European Green Bond illustrates the unwavering appetite of investors for high-quality green assets, as well as market support for our strategy of gradual alignment with the EU Taxonomy.
“While our Climate Awareness Bonds are already aligned with the Taxonomy requirement for Substantial Contribution, with this bond today we are extending, for a specific initial set of activities and projects, this alignment to all Taxonomy requirements. This step-by-step approach facilitates the uptake of the European Green Bond Standard, within the umbrella already established by the Green Bond Principles.”