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'Green Bonds - Made by KfW' met with great response from USD investors
Frankfurt (ots) -
- KfW sells record volume of USD 1.5 billion in its first USD Green Bond issuance - Strong demand from US investors with a focus on SRI investments
KfW has expanded its Green Bond activities to the USD market. Yesterday, KfW successfully introduced its debut bond with a volume of USD 1.5 billion making it the largest USD Green Bond issuance to date. The net proceeds of the bond are used for environment and climate protection projects. The USD market debut follows a strong inaugural EUR-denominated Green Bond issued by KfW in July 2014.
The issue led by Bank of America Merrill Lynch, Citi and Morgan Stanley has a maturity of 5 years and pays an annual coupon of 1.75%. The majority of accounts involved are US-based investors focussed on socially responsible investments (SRI). Total demand of USD 2.5 billion was well in excess of the issuance volume.
"The high degree of transparency and the unprecedented quality standards of our Green Bonds have convinced US experts", comments Dr. Günther Bräunig, member of KfW's Executive Board and responsible for capital markets. KfW held investor meetings in the United States in the run-up to the bond issuance introducing its Green Bond approach.
"This is a good example for green bond issuance and will help support the development of this important market", says Ashley Schulten, a Director at BlackRock, one of the world's leading investment management firms headquartered in New York.
The unique feature of 'Green Bonds - Made by KfW' is the impact measurement: The effect of investments in terms of greenhouse gas reduction is made transparent to investors. The bond proceeds of the USD Green Bond are linked to KfW's environment investment program, "Erneuerbare Energien" ("KfW Renewable Energies Programme - Standard"). The positive and sustainable effects on the environment of KfW's financings under the program are certified by the independent, non-profit Center for Solar Energy and Hydrogen Research, Baden-Württemberg (ZSW). Past results show that an investment of EUR 1 million triggers yearly greenhouse gas reduction of 800 tons on average. Furthermore, the qualified, independent research center CICERO has positively evaluated KfW's Green Bond approach. Those high market standards and the clear, understandable set-up are appreciated by investors.
"KfW's long history of financing sustainability and relative valuation made KfW's inaugural USD Green Bond an attractive investment opportunity. We especially appreciate KfW's willingness to provide investors with its impact measurement certified by ZSW, a unique positive attribute in today's green bond market", confirms Stephen M. Liberatore, Managing Director at TIAA-CREF Asset Management, a New York based fund manager.
KfW is one of the largest financiers of environment and climate protection measures worldwide. With "Green Bonds - Made by KfW", KfW directly links its financing activities for climate protection to capital markets. Investors benefit from the excellent credit and sustainability ratings and simultaneously support climate and environmental protection without bearing specific project risks.
"The groundwork is done" concludes Dr. Bräunig. "We have broadened our strategic dialogue on 'responsibility in the capital market' with investors. In issuing the two largest Green Bonds we have supplied the market with liquidity which was our aim from the beginning. We will further develop our Green Bond concept into other markets and products."
KfW will enhance transparency by publishing the use of proceeds on a regular basis going forward. The first report on KfW's website is expected for the second half of October.
KfW USD Green Bond I/2014 - Details
ISIN: US500769GF56 WKN: A13R63 Issuer: KfW Guarantor: Federal Republic of Germany Rating: Aaa - stable (Moody's) AAA - stable (S&P) AAA - stable (Fitch) Sustainability Ratings (as of September 30, 2014): Imug: 1. out of 126 Oekom Research: 3. out of 23 Sustainalytics: 4. out of 191 Size: USD 1.500.000.000 Tenor: 15.10.2014 - 15.10.2019 Coupon: 1.75 % Issue price: 99.743 % Yield: 1.804 % Listing: Luxembourg Denomination: USD 1,000
Selected investors among others:
AP4, Blackrock, Barclays' Treasury, CalSTRS, Calvert Investment Management, Inc., Inter-American Investment Corporation, Morgan Stanley Wealth Management, Praxis Intermediate Income Fund, SSgA High Quality Green Bond Fund and TIAA-CREF Asset Management
Detailed information regarding the Green-Bond-concept, the use of proceeds of "Green Bonds - Made by KfW" and the independent third-party opinions are available at www.kfw.de/greenbonds.
This press release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. KfW has registered the securities that are the subject of this press release for sale in the United States. The offering of the securities in the United States will be made by means of a prospectus that may be obtained from KfW and will contain detailed information about KfW and its management, financial statements and information about the Federal Republic of Germany.