Vesteda first residential fund to issue a EUR green bond
Today Vesteda successfully issued its inaugural green bond. This is the second benchmark size bond under its €2.5 billion EMTN programme and the first EUR green bond by a residential fund. The €500 million bond has a term of 8 years and a coupon of 1.5%. The bond was more than 6 times oversubscribed. ABN AMRO acted as the sole Green Bond Structuring Advisor, together with BNP Paribas, ING, Rabobank and SMBC Nikko as Joint Bookrunners. The bond will be listed on Euronext Amsterdam.
The proceeds of the bond will be used to finance homes with a minimum EPC label A, and homes which have made an improvement of at least two EPC label-steps up to a minimum EPC label C.
Vesteda sees corporate sustainability and social responsibility as vitally important for the long-term value development of its portfolio, the organisation and the society in which it operates. The focus on sustainability makes Vesteda eligible for financing itself by means of a green bond. This green bond underpins Vesteda’s sustainable strategy and helped to attract a broader group of investors with a strong focus on sustainable investment opportunities.
Vesteda developed a Green Finance Framework (https://www.vesteda.com/nl/over-vesteda/investor-relations/credit-investors.aspx) to issue green bonds. Under this framework Vesteda can also issue other green debt instruments, such as loans and private placements. The framework obtained a Second Party Opinion by Sustainalytics and the green bond obtained a pre-issuance certification by the Climate Bonds Initiative.
The proceeds of the green bond will be fully allocated to the eligible green assets (homes) of Vesteda. Vesteda will report on the estimated energy savings and greenhouse gas emission avoidance of the assets under this green bond.
“We are proud that we are the first residential fund to issue a EUR green bond and we are very pleased that the issue was successful. This green bond not only underpins our sustainable strategy but also helps to further strengthen our capital structure, widen our investor group, reduce our cost of capital and improve our debt maturity profile”, says Vesteda CFO Frits Vervoort.
“With its Climate Bonds Certification Vesteda proofs it sets the green bar high for sustainable investment in residential real estate, earmarking assets that are verifiably in line with the Paris climate agreement. We are very pleased with this market leadership made in Holland,” says Climate Bonds Investor Engagement head Manuel Adamini.
Vesteda has a BBB+ rating, which has recently been confirmed by the rating agency Standard & Poor’s. A similar rating is anticipated for the new issued bond.
Vesteda is an entrepreneurial investor with a clear focus on the Dutch residential real estate market. Vesteda invests funds for institutional investors such as pension funds and insurers. Vesteda has total capital of €7.3 billion invested in real estate. Its rental portfolio stands at a total of approx. 28,000 residential units. Vesteda’s homes are mainly located in the economically strong regions and core urban regions.
About Climate Bonds Initiative
The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy. It undertakes advocacy and outreach to inform and stimulate green bond markets, provides policy models and government advice, international development programs, market data and analysis and administers the Standards & Certification Scheme. For more information, please visit www.climatebonds.net.