Commerzbank raises €500m from inaugural green bond

The issuance will help finance on and offshore wind and solar projects in Europe and the Americas


Joe McGrath

Commerzbank issued its first green bond in the capital markets on Tuesday, raising €500 million.

The German bank said it would be using the proceeds to refinance renewable energy projects, adding that the decision to move into the green bonds market was part of the organisation’s commitment to sustainability.

In a media statement, the group said that the non-preferred senior bond attracted notable investor interest, with the final order book at re-offer above €1.1 billion.

“With our inaugural green bond we are sending an important signal about the growing significance of this asset class,” the bank’s divisional board member Inga Johal, said. “It also demonstrates our strong commitment to climate protection and reinforces the Bank’s sustainability strategy.”

With a term of five years, the bond has an annual coupon of 1.25%. The issuance was verified by ratings agency Sustainalytics as having met the criteria as laid out under the International Capital Market Association’s Green Bond Principles.

The bond will be used for loans supporting onshore and offshore wind projects and solar projects across European countries and in the Americas.

Commerzbank is an established player in renewable energy sector financing, with a portfolio of more than €5.2 billion as at the end of December 2017.

The issuance comes two months after ratings agency Moody’s downgraded its forecast for green bond issuance in 2018.

In August, ESG Clarity reported that green bond issuance for the full year was likely to be between $175 – 200 billion, down from the $250 billion originally forecast at the end of 2017. The Moody’s report suggested that growth rates have been slowed by rising interest rates which have impacted debt issuance globally.


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