Climate Bonds has posted a new item, ‘AfDB’s long-awaited AAA $500m inaugural green bond is sold out’

Jay Owen SRI/ESG News

Climate Bonds has posted a new item, ‘AfDB’s long-awaited AAA $500m inaugural green bond is sold out

The African Development Bank (AfDB) has just issued the 3 year, USD500 million green bond they flagged over Summer; the deal closed yesterday at 14:30 London time. The bond 10% over-subscribed by the close of the half-day sales window. Coupon was 0.75% – yes, interest rates really are that low for AAA bonds!

Proceeds of the bond will go to financing of low carbon and climate resilient projects. These include “renewable energy generation, energy efficiency, vehicle energy efficiency fleet retrofit or urban transport modal change, biosphere conversation projects, solid waste management, fugitive emissions and carbon capture, urban development, and water supply and access.”

Socially responsible investors” bought 84% of the bonds. Buyers were 43% asset managers, 28% central banks and official institutions, 28% insurance companies and pension funds, and 1% retail and private banks. 52% went to the Americas, 39% to Europe, the Middle East & Africa (mainly Europe), and 9% to Asia.

The 36 investors included the Third Swedish National Pension Fund, AP4, BlackRock, Calvert Investments, Nordea IM, Pictet AM, Praxis Intermediate Income Fund, State Street Global Advisors for their ‘High Quality Green Bond Fund’, TIAA-CREF, Trillium AM and CalSTRs (a member of the Climate Bond Standards Board).

JP Morgan, Morgan Stanley and SEB were joint-lead managers.

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