Rising Trend of Green Bond Issuance – NEPI Rockcastle Raises €500 Million Green Bond

With a presence in nine countries and a €5.8 billion investment portfolio as of December 31, 2020, NEPI Rockcastle is the leading owner and operator of shopping centres in Central and Eastern Europe (CEE). NEPI Rockcastle owns and operates multiple retail sites (excluding joint ventures), which attracts millions of visitors. According to Company, 325 million visited in 2019 followed by 221 million visits in 2020. The Group is the main strategic partner for large retailers targeting CEE nations, with group-level management of tenant relationships and a focus on cross-country collaboration.

Registered office of the NEPI Rockcastle is based in the Isle of Man. NE Property B.V. a wholly owned subsidiary of NEPI Rockcastle, has raised €500 million in green corporate bonds. With an issue price of 98.713 percent. NE Property B.V. has priced the €500 million, unsecured, 8-year Eurobond expiring in January 2030 @ 2% fixed coupon.

Bonds were given BBB grades by S&P and Fitch, in line with the EUR4 billion EMTN Program rating and the corporate rating.

S&P and Fitch assigned the Bond BBB ratings, in line with the EUR4 billion Euro medium-term note (EMTN) Programme rating and the corporate rating. EMTN) Programme are primarily used for offerings securities outside the United States, particularly in Europe.

NEPI Rockcastle’s issuance received very good response from the market. The Bond benefitted from the strong demand. Due to strong confidence from the investors on company’s credit quality and ability to service the debt, issuance was oversubscribed by over €1.5 billion, reflecting international bond investors confidence.

Issuance was distributed to broad range of institution which involved selling of approx. 78% to asset managers, 12% to banks and others. Demand was huge and diversified across Geographies including 34% from France, 24% from UK/Ireland, 15% from DACH region and 15% from Benelux. Significant part of the issuance was placed with green and ESG investors. Citi, ING, J.P. Morgan, Société Générale and UniCredit were the Joint Lead Managers of the issue and company has applied to Euronext Dublin for listing the Bond.

NEPI Rockcastle intends to issue green bonds in accordance with the Framework, which requires that proceeds be used to finance and/or refinance existing and/or future projects that improve the environmental performance of the Group’s property portfolio and contribute to the Company’s climate impact mitigation goals.

The Johannesburg Stock Exchange (“JSE”), Euronext Amsterdam (“Euronext”), and A2X all list NEPI Rockcastle’s shares. On a semi-annual basis, the Group distributes at least 90% of its distributable earnings freely.

ING is one of the Joint lead managers of the issue. ING is at the fore-front of green issuance in the world and increasingly diversifying its books towards the green portfolio. ING is one of the most sustainability driven publicly traded banks in the world. S&P Global Ratings gave ING a’strong’ ESG rating in January 2021. Among the 192 worldwide banks ranked by MSCI, ING is a ‘leader.’ MSCI provides indexes, portfolio risk, and performance analytics to institutional investors. It increased ING’s ESG rating from ‘A’ to ‘AA’ in December 2020.

ING has a lending portfolio of over €500 billion spread across a variety of industries which ING will start steering in line with the requirements of the Paris Agreement’s to keep the Global Tempreture well-below-two-degree goal. ING has co-created the Terra method, which is a scientific approach involving precise techniques to measure its portfolio. The Terra method examines the technological shifts required in certain industries for maintain global temperatures well below two degrees Celsius. Energy (including oil, gas, renewables, and conventional power), automobile, shipping & aviation, steel, cement, residential mortgages, and commercial real estate are among the industries where the largest greenhouse gas emissions are being produced.

ING has built a Green Bond Framework that fulfils the highest standards of transparency and disclosure and corresponds with the ICMA Green Bond Principles to support the robust growth of our Sustainable Finance portfolio and to meet green finance demands (GBP).

Investors are moving their cheese towards greener project. In near future liquidity will start squeezing for the carbon rich projects followed by the tapering of excess Money Supply by global Central Banks.

Bureau Galactik Views

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