The European Investment Bank (EIB) has issued a privately placed index-linked €500m ($532m) climate awareness bond (CAB).
The "Tera Neva" bond, which was sold to 13 French institutional investors – 10 of them insurers -- has a maturity of 13.5 years and a coupon that is linked to the average performance of Solactive's ethical Europe climate care index.
The performance of the index will be measured after four, eight and 13.5 years and the average of these figures will be used to calculate the coupon, which is paid only at maturity.
"It was targeted only at French institutional investors. We knew that demand existed with these investors, which were looking for a long-term product linked to this specific index," said Nicola Mercusa, senior capital markets officer at the EIB. "All those who we expected to participate were present in the deal."
The 13 investors were:
- ACMN Vie (insurer)
- Aviva France (insurer)
- Carac (pension fund)
- BNP Paribas Cardif (insurer)
- CNP Assurances (insurer)
- ERAFP (pension fund)
- Generali (insurer)
- Groupama (insurer)
- Groupama (bank)
- HSBC Assurances (insurer)
- Natixis Assurances (insurer)
- Prevoir (insurer) and
- Suravenir (insurer).
Proceeds from the bond will be used to fund renewable energy and energy efficiency projects.
The issuer is rated AAA by both Standard & Poor's and Fitch.
BNP Paribas acted as the sole structuring agent and bookrunner for the deal.