UNITED STATES—IFC, the largest global development institution focused exclusively on the private sector in developing countries and a member of the World Bank Group, has issued its inaugural euro-denominated green bond in the N-Bond format.
IFC in a statement said that the green N-Bond was able to attract German institutional investor demand, raising 20 million Euros for climate-smart investments.
IFC revealed that some of the climate-smart ventures that it intends to invest the funds in include renewable energy, green buildings, sustainable forestry, and energy efficiency.
“We are pleased to see strong investor appetite for investing in the climate-smart business solutions that are vital for sustainable growth of economies, better standards of living and the future of our planet,” said IFC Vice President and Treasurer John Gandolfo.
According to the statement, the notes which were settled on October 31st, 2019 are structured with an embedded issuer’s call-right after ten-years, maturing in 40 years, while carrying a coupon of 1.027%.
Gandolfo also said that IFC’s inaugural euro-dominated green bond in the N-Bond format demonstrates how the institution was mobilizing innovative finance and attracting institutional investors, to meet the Sustainable Development Goals.
Fritz Luithlen, Global Head of Debt Capital Markets at DZ BANK AG said: “Transactions like IFC’s inaugural green registered notes foster the penetration of the German financial market with sustainable and green investment alternatives.”
Fritz further noted that DZ BANK, “as the Central Bank and international arm of the German Cooperative Financial System is delighted to collaborate with IFC in dealing such customized solutions to the steadily growing number of green and sustainable conscious institutional investors in and outside of Germany.”
DZ Bank is playing a supporting role to the IFC’s N-green bond as a sustainable, innovative, multi-channel issuer that taps the market with green bonds in different currencies and legal formats.
According to Maximilian Lainer, Head of MTN at DZ BANK AG, Registered Notes, or so-called N-Bonds, are a widely used issuance format among German institutional investors.
The notes are governed under German law and obtain certain accounting advantages compared to standard MTN-issues for hold to maturity investments under German GAP, revealed Lainer.
IFC is one of the earliest issuers of green bonds, launching a green bond program in 2010 to help catalyze the market and unlock investment for private sector projects that support renewable energy and energy efficiency.
So far, IFC has a cumulative green bond issuance of more than $10 billion across 157 green bonds in 18 currencies.