Wednesday 30th September: ING is pleased to announce that it has acted as sole structuring advisor and joint bookrunner for AIB Group plc, as the Irish bank launches its first green bond.
- The €1bn transaction marks first-ever green bond issued by an Irish bank, the second evergreen T2 transaction issued by a European bank
- The largest AIB unsecured transaction post-crisis optimising capital efficiency
- The €1bn proceeds from the green bond will contribute to the financing of projects with clear environmental and climate change benefits
As Sole Green Structuring Advisor and Joint Bookrunner, ING coordinated all green-related workstreams with the issuer over a period of nearly two years, culminating in the inception of AIB’s green bond programme and the highly successful new green bond issuance. Investor interest for the new green bond was substantial, with orders peaking at >€2.5bn.
With the help of ING, AIB set up its Green Bond Framework in September 2019, and since then engaged with ESG investors across Europe on both the framework and the wider AIB Sustainability strategy. AIB recently updated its Framework to align with upcoming EU taxonomy regulation definitions, alongside an updated Second Party Opinion from Sustainalytics and various other documents, including a Pre-Issuance Impact Report, all demonstrating AIB’s commitment to align to best practice.
An amount equivalent to the proceeds from AIB’s new long 10.5-year non-call 5.5 Tier 2 will be used to finance or refinance assets in its eligible EUR 1.7bn green loan portfolio. The current portfolio is comprised of green commercial buildings and renewable energy projects, concentrated in Ireland and the UK.
The green bond offered investors the chance of a highly impactful investment, equating to 461-ton CO2eq/yr of avoided emissions per mil €URO invested (based on the portfolio as of FY19). Investor interest was diversified across geography and investment type, with the transaction more than 2.5 times subscribed at its peak demonstrating a quality investor base representing both green and traditional funds.
Vincent de Vries, Managing Director, Financial Institutions Group, Debt Capital Markets said,
“We are proud to be part of this transaction. As a bank, we constantly seek to be at the forefront of innovation and change. As the first ever green bond issued by an Irish bank, it’s a significant milestone. We believe in making an impact through finance, and our role is to help investors do the same. Congratulations to AIB on this momentous transaction and we look forward to working together to achieve our sustainability aims.”
Donal Galvin, Chief Financial Officer, AIB said,
“We are pleased to partner with ING for the issuance of our first Green Bond, recognising ING’s expertise and experience in sustainable finance. As the first Irish bank to successfully complete a green bond issuance, we are reaffirming AIB’s commitment as a sustainable and strongly capitalised bank. The issuance of Tier 2 capital in the form of a green bond, supported by ING, effectively aligns AIB’s capital and sustainability strategies.”