The FINANCIAL — Commerzbank has issued its inaugural green bond in the capital market. The issue raised €500 million. The Bank will use the proceeds to refinance renewable energy projects.
The non-preferred senior bond attracted keen investor interest. The final order book at re-offer was above €1.1 billion. The bond has a term of 5 years with an annual coupon of 1.25%. Commerzbank obtained its second party opinion from the renowned sustainability ratings agency Sustainalytics, which confirms that the bond complies with the latest Green Bond Principles.
Commerzbank already has a wide experience in the green bond market. In issuing its inaugural green bond, the Bank is adding to its expertise in this fast-growing asset class.
The bond is structured in accordance with the Green Bond Principles. This market standard provides investors with a high degree of transparency as regards how the funds are actually used. Commerzbank has earmarked the bond proceeds for loans for onshore and offshore wind projects and solar projects in Germany, other European countries, and North and South America.
Commerzbank is committed to the objective set at the UN Climate Change Conference in Paris in 2015 to limit global warming to less than 2 degrees Celsius versus pre-industrial levels. The associated energy revolution and reduction in CO2 emissions are creating a need for new technologies and products requiring large investments. Commerzbank is one of Germany’s top finance providers for the renewable energy sector, with a portfolio of around €5.2 billion as of December 2017.