ABN AMRO is the first commercial bank in the Netherlands to issue a ‘euro green bond’. This product enables investors to invest in mortgages of highly energy-efficient homes, loans for solar panels on existing homes and sustainable commercial property.
The bank has had the sustainable assets in question validated by ‘oekom research’ and the Climate Bond Initiative (CBI) based on transparency and sustainability criteria. A total of around 50,000 tonnes of carbon emissions are avoided in this model portfolio – equivalent to the annual emissions of more than 10,000 cars.
Popular among investors
Daniëlle Boerendans of ABN AMRO Funding & Capital Issuance: ‘During our talks with investors we noted that they were very interested in our first green bond. This was reflected in the order book, which was well oversubscribed.’ The EUR 500 million bond has a maturity of 5 years and was issued today at midswaps + 45 basis points. ABN AMRO has structured the green bond itself. The majority of investors are European institutional parties that favour sustainable investments. ‘These sustainable investors further diversify our existing investor base. Given the success of the first bond, we are definitely keen to return to the green bond market on a regular basis.’
Sustainable investment with a moderate risk profile
Joop Hessels, ABN AMRO Green Bond Origination: ‘We have followed the advice of the green bond principles and responded to the needs of NGOs and investors. The result is a transparent and innovative bond. Investors can invest in highly sustainable property while benefiting from the rating and moderate risk profile of ABN AMRO, the issuer of the bond.’ ABN AMRO will use the knowledge it has acquired in this process to advise other organisations on issuing green bonds.
Bridging the gap with the capital market
Developed areas in the Netherlands account for more than 25% of the country’s carbon emissions. Richard Kooloos of ABN AMRO Sustainable Banking: ‘ABN AMRO is one of the organisations that has endorsed the National Energy Agreement. The bank’s balance sheet consists largely of mortgages and property loans, so we can make a real contribution to the goal of making developed areas in the Netherlands energy-neutral. We will do so on the one hand by financing sustainable assets; on the other, by using this green bond to bridge the gap with the capital market. We will not meet the 2020 targets set in the Energy Agreement with bank financing alone. Financing from the capital market is essential.’