On Wednesday, 6th November 2013, FMO placed its successful inaugural Sustainability Bond, a 5-year EUR 500 million RegS transaction. Through this transaction, FMO confirms its commitment towards environmental and socially responsible funding and the development of the Sustainability Bond market.
The proceeds of the Sustainability Bond support the financing of Green and Inclusive Finance Projects according to FMO’s Sustainability Bonds framework, which is aligned with FMO’s long term strategy of inclusive and green growth. Projects to be financed include those in renewable energy generation, energy efficiency, responsible agriculture, food production, forestry, transport, water supply and access, as well as Microfinance Institutions (MFIs) and Micro, Small & Medium-sized Enterprises (MSMEs).
Given the strategic nature of this transaction, FMO announced mid October the intention to hold a series of investor meetings in Europe with a Sustainability Bond issue to potentially follow up. With a strong market backdrop and limited competing supply, the transaction was announced on Tuesday 05 November in the European afternoon. Books for a EUR 500 mio “no grow” transaction opened shortly after 10am CET on Wednesday with a spread guidance of mid-swaps +12/+14 bps, after collecting more than EUR 500 mio in IoIs at IPTs of Mid-Swaps+15bps in the early morning. The final spread was set at Mid-Swaps +12bps only 15 minutes afterwards due to the strong momentum. The order book closed at 10.25am CET in excess of EUR 1.2bn. The Sustainability Bond subsequently priced at Mid-Swaps +12bps, which offered an attractive spread for investors keen on sustainability exposure from a rare Dutch AAA Agency, especially taking into account the long-term commitment and strong financial backing of the Dutch State to FMO.
Distribution:
More than 50 high quality real money investors were involved, highlighting the broad support for the Dutch EUR debut issuer and the growing interest in the sustainability feature of the bond. Participation was especially strong from the Nordic region (27%), the Netherlands (26%), Germany /Austria (14%) and France (13%). The distribution was well balanced across the various types of investors, as the graph below highlights, with a proportion of investors with ESG considerations estimated at around 75%. In particular, the bond received overwhelming support from investors focused on promoting socially responsible investments such as Aegon AM, AG2R, La Mondiale, Andra AP Fonden (AP2), Fjärde AP Fonden (AP4), APG, ASN, AXA IM’s Label Euro Obligations Fund, Natixis AM – Mirova, SNS Bank, … among others.
This transaction underlines the strategic goal of FMO to widen its institutional investor baseaway from their recent USD benchmarks, as well as Samurai JPY, AUD and CHF deals issued throughout the past years.
Crédit Agricole CIB, J.P. Morgan and Rabobank acted as joint-bookrunners on this debut transaction.
Transaction Details:
Inaugural EUR 500 million 5-year Sustainability Bond
Terms of the Transaction:
Size: EUR 500 mio
Coupon: 1.25%
Format: Fixed rate note / RegS
Issue Date: 06 November 2013
Maturity Date: 13 November 2018
Tenor: 5 years
Pricing: Mid-Swaps +12bps, equivalent to OBL167 + 55.6bps
Re-offer Price: 99.966% Re-offer yield: 1.257%
Denominations: EUR 100k + EUR 1k
ISIN: XS0993154748
Joint Bookrunners: Crédit Agricole CIB, J.P. Morgan, Rabobank
For more information about FMO Sustainability Bonds, please visit the FMO Sustainability
webpage at:http://www.fmo.nl/investorrelations
About FMO
FMO is the international development bank of the Netherlands which supports businesses and financial institutions in developing countries with capital and skills as well as managing development funds on behalf of the Dutch government. FMO is 51% government owned, with strong government support via its support agreement with the Dutch state.
For further details please contact:
Huib-Jan de Ruijter (Financial Markets Director)
Tel +31 70 3149531
E-mail h.de.ruijter@fmo.nl
Angelica Ortiz de Haas (Manager Sustainability Development)
Tel +31 70 3149508
E-mail a.ortiz.de.haas@fmo.nl
Arthur Leijgraaff (Treasury Officer)
Tel +31 70 3149852
E-mail a.leijgraaff@fmo.nl
