Standard Chartered’s €1bn inaugural green bond oversubscribed

Standard Chartered bank has issued its first green bond. The €1bn issuance will target a pool of eligible assets in renewable energy, climate-resilient infrastructure and green buildings among other categories. The issuance has attracted significant investor attention, with the bond being oversubscribed.

According to the bank, this is its fifth ‘sustainable finance’ issuance. It is however, the first time that the bank has opted for a solely green-labelled instrument.

“Our first sustainable finance issuance in a green-only format is an important milestone and demonstrates Standard Chartered’s unique ability to raise capital in the world’s largest financial centres and deploy it across borders, into those markets where the need for sustainable finance is most acute”, said the bank’s CFO Diego De Giorgi.

The bond’s use of proceeds is governed by the bank’s Sustainability Bond Framework – which outlines a pool of eligible projects. According to the bank, this pool of assets currently includes a $17.4bn pipeline of 355 ‘green projects’. 70% of assets are in Asia, Africa and the Middle East.

Marisa Drew, the bank’s chief sustainability officer says the emerging markets tilt is deliberate.

“In emerging markets, every dollar of financing can have a disproportionate impact in terms of reducing carbon emissions. Our financing of renewable energy projects in Indonesia will have a 10 times greater impact on CO2 avoided than a similar sized project in France due to the displacement of power on more carbon intensive grids”, she commented.

Even though the issuance was a first of its kind, it attracted a fair share of investor demand, Group treasurer Dan Hodge reported an orderbook exceeding the targeted raise.

“Investor demand was strong for this issuance with orderbooks peaking at over €3.9bn”, he said.