EIB issues first Swiss-denominated Climate Bond

The CHF350m issue, the EIB’s first CAB transaction of 2014, comes after a record year for issuance of the green instrument.

The European Investment Bank (EIB) has issued the first Climate Awareness Bond (CAB) in Swiss Francs, sealing another landmark for the initiative it pioneered seven years ago.

The Luxembourg-headquartered institution raised CHF350 million (€284 million; $388 million) via the innovative instrument on January 8, in the form of bonds carrying an annual coupon of 1.625 percent and a final maturity date of 4 February 2025.

This issue, the EIB’s first CAB transaction of the year, was placed with Swiss investors. Lead managers for the transaction were Barclays, Credit Suisse and Deutsche Bank.

Launched by the EIB in 2007, CABs raise funds from fixed-income investors to back EIB lending for renewable energy and energy efficiency investments. They provide investors with the opportunity to direct cash towards projects contributing to climate action, while benefitting from the credit quality of EIB as an issuer.

“Following a record year for Climate Awareness Bond issuance, this first CAB of 2014 underscores EIB’s continued commitment to the green bond market,” Bertrand de Mazières, EIB director general of finance, said in a statement.

CABs have raised €3.4 billion since inception. 2013 set a new high-water mark for the instrument – with the EIB issuing €1.4 billion, its largest volume ever.

“This inaugural Swiss Franc denominated Climate Awareness Bond (CAB) issue further highlights the continued growth in demand from investors for Socially Responsible instruments in their portfolios,” said Charlie Berman, chairman of debt capital markets for Europe, the Middle East and Africa (EMEA) at Barclays.

The EIB counts among the largest financiers of projects to tackle climate change, having provided over €13 billion to support green initiatives globally in 2012 alone.