EIB Raises CAD500 Million In Canada Green Bond Offering
The European Investment Bank continues to push forwards with its Climate Awareness Bond issuance spree, entering the Canadian market for the first-time.
The European Investment Bank (EIB) raised CAD500 million through the first green bonds issuance in Canada by a non-Canadian issuer, offering bonds at a coupon rate of 1.25% with a maturity of 5 years.
The bonds, rated AAA, were offered at a coupon rate higher than the bonds issued by the Government of Canada. BMO Capital Markets, Scotia Capital, and TD Securities were the joint book runners. Investors in the issue included green bond funds, pension funds, and central banks.
Proceeds from the Climate Awareness Bonds are earmarked for two types of projects:
- those that invest in renewable energy projects such as wind, hydro, solar and geothermal energy production
- those that invest in energy efficiency projects such as district heating, co-generation, building insulation, energy loss reduction in transmission and distribution and equipment replacement with significant energy efficiency improvements
EIB has already raised €3.5 billion through green bond issuance in several countries this year.
So far four green bond issues have been floated in Canada. Export Development Canada (US$300 million); the province of Ontario (CAD500 million); TD Bank (CAD500 million); and The North Island Hospitals Project (a public private partnership that raised CAD231.5 million).
The global green bonds market has grown significantly this year. While the cumulative issuance would increase by 10-20%, several new companies and institutes have entered the green bonds market. The Climate Change Support Team, working for the United Nations Secretary General has described green bonds as very attractive to institutional investors, with demand for green bonds much larger than the supply.
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