Media contacts
For questions about financing or funding possibilities, business offerings and acquisition, please use the contact form.
The number below is for media inquiries only.
Monica Beek
Media Spokesperson
T: +31 70 314 9130
M.Beek@fmo.nl
On Wednesday 5th June 2024, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), rated AAA/AAA (S&P/Fitch), priced USD 500 million 5-year green fixed rate benchmark at SOFR Mid Swaps plus 38 basis points from Initial Price Thoughts (“IPTs”) of SOFR Mid Swaps plus 41 basis points area, and Guidance of SOFR Mid Swaps plus 39 basis points area.
FMO seized the perfect window to access the primary market with their 5-year green fixed rate benchmark, supported by a positive market backdrop and ahead of the high-profile events and data due later in the week, namely the ECB verdict and US Payroll data.
The successful transaction represents FMO’s first fixed rate benchmark of the year. FMO last launched a USD 500m 5-year green fixed rate benchmark in November 2023. For 2024, FMO communicated a long term funding programme of EUR 1 to 2 billion equivalent.
The issue carries an annual coupon of 4.5% and will mature on 12th June 2029. It was priced with a spread of 15.13 basis points over the UST 4.500% due 31 May 2029 Treasury note, equivalent to SOFR Mid Swaps plus 38 basis points. The pricing translates to a re-offer yield of 4.482% semi-annual / 4.532% annual.
The mandate was announced on Thursday 30th May for a series of fixed income investor calls ahead of a new USD 500m (no-grow) green fixed rate transaction with a 5-year maturity. Following very positive feedback during several investor calls on Monday 3rd June, the issuer decided to proceed and at 12:30pm UKT on Tuesday 4th June IPTs were released at SOFR Mid Swaps plus 41 basis points area.
On the back of very strong indications of interest (“IOIs”) that were in excess of USD 1.2 billion (excluding JLM), the book officially opened on Wednesday 5th June at around 8am UKT, with price guidance of SOFR Mid Swaps plus 39 basis points area +/-1 basis point with pricing in range.
The announcement of IOIs and Official Price Guidance generated further momentum and by 10.15am UKT the order book was already in excess of USD 2 billion (excl. JLM interest). Given the very good quality and size of the order book, the decision was taken to fix the spread a further 1 basis point tighter at SOFR Mid Swaps plus 38 basis points. The transaction ended up over 4x times oversubscribed with a final book size in excess of USD 2 billion.
The transaction benefited from seeing demand from a diverse range of high-quality investors. The distribution by investor type and geography was as follows: Central Banks & Official Institutions 53%, Banks & Bank Treasuries 41%, Fund Managers / Insurance / Pension Funds 6%. In terms of geographic distribution, 60% was placed in EMEA, 25% in Americas and 15% went into Asia.
The broad and global distribution of this transaction is testament to FMO’s support within the global investor community.
The net proceeds of the issue of Notes (in the form of Green Bonds) will be allocated within FMO’s Treasury to a special sub-portfolio that will be linked to FMO's lending operations in the field of green finance and inclusive finance (“Eligible Projects”).
FMO’s definition of green projects focuses on climate-related projects. FMO defines three sub-categories under green: climate change mitigation, climate change adaptation and other footprint.
As long as the notes issued under the Sustainability Bonds Framework ("SBF") are outstanding, the balance of the sub-portfolio will be reduced by amounts corresponding to the financing or refinancing of Eligible Projects, or to repay a note issued under the SBF. Pending allocations, the net proceeds of the issue of the Notes will be held in the Issuer’s liquidity portfolio and may temporarily be used for different purposes in case of liquidity stress situations.
For more information on the SBF, please see https://www.fmo.nl/sustainability-bonds-framework
This transaction was joint-lead managed by BofA Securities Europe S.A, Daiwa Capital Markets Deutschland GmbH, HSBC Continental Europe and RBC Capital Markets (Europe) GmbH.