German mortgage bank Berlin Hyp has issued its fifth unsecured senior ‘green’ bond, raising €500 million.
The bond has a term of 10 years, offers a coupon of 1.5 percent and is rated A1 and A+ by Moody’s and Fitch, respectively. The re-offer spread was set at mid-swap plus 60 basis points.
The order book reached more than €500 million from 66 orders. German investors accounted for 88 percent of investments in the bond, while French and British investors followed with 5 percent and 4 percent, respectively.
Saving banks took the largest share of the bond, accounting for 55 of investment. Asset managers and insurance companies also participated, with 22 percent and 15 percent of investment, respectively. The bank also noted that 20 percent of the bond went to socially responsible investors.
The proceeds of the bond, an unsecured bank bond in benchmark format, will be used to refinance loans for buildings deemed to meet certain energy efficiency and sustainability criteria. As with the green Pfandbrief, the bank will also aim to invest an amount equivalent to the proceeds of the issue in additional new green building finance for the term of the bond.
The newly issued green bond increases the bank’s outstanding green bond volume to € 2.5 billion. Berlin Hyp’s aim is for 20 percent of its loan portfolio to be made up by green building financing by 2020.