Berlin Hyp taxonomy-aligned green bond attracts over €1 bn

Maria Teresa Dreo-Tempsch.

Berlin Hyp has issued the first Green Bond under its new taxonomy-aligned green bond framework and received orders worth over €1 billion from 88 investors.

Berlin Hyp said that the new bond makes it one of the first banks to align its lending activities with the EU Taxonomy’s requirements for buildings and construction activities.

Its green bond framework enables two green loan products to run in parallel during a transition period that runs until the end of 2025. One bond is focused on energy efficiency and is similar to Berlin Hyp’s existing approach. The other bond is fully aligned with EU Taxonomy climate change mitigation criteria.

The new-style bond will command an increasing share of Berlin Hyp’s overall new business between now and 2025 representing 100% of bond issues from 2026 onwards.

The new €500 million green senior preferred bond has a five-year tenor and is rated Aa2 by Moody’s and AA- by Fitch. The coupon is 0.375%, and its 0.412% yield is based on a re-offer price of 99.817%.

Berlin Hyp’s joint lead managers on this transaction are Commerzbank, Crédit Agricole, JP Morgan, LBBW and UniCredit who opened their books with an initial spread guidance of mid swap +45 area basis points.

Spread revised after orders worth €1.1 bn recorded

After initial orders worth €1.1bn were recorded, the spread was revised and fixed at mid swap +30 basis points and orders from 88 investors for more than €1bn remained on the order book at that level.

German investors accounted for 78% of the bond and French investors for 12%. Banks and savings banks were allocated 47%, followed by funds with 33% and official institutions with 10%. Dedicated ESG investors took 40% of the debenture.

“With our new, ambitious, taxonomy-aligned Green Bond Framework we’re setting the course for the future,” said Maria Teresa Dreo-Tempsch, Berlin Hyp director responsible for capital markets. “The positive feedback from investors and their broad demand for our 15th green bond are the best reward we can think of.”

Hauck Aufhäuser Lampe Privatbank acted as a co-lead manager, Crédit Agricole was sole green bond structural advisor.