BME’s AIAF Market Exceeds €47 Billion In Sustainable Funding

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Fernando Rodríguez| The AIAF market has surpassed 47 billion euros in sustainable fixed income issues with the incorporation today of the Kingdom of Spain’s first green bond for 5 billion euros.

The Spanish government placed this bond last week, as part of a sustainable financing programme that the Treasury’s latest estimates put at a total of 20 billion euros. The funds will be used to finance projects promoting the ecological transition. They are aimed at mitigating and adapting to climate change, the sustainable use and protection of water and maritime resources, the transition to a circular economy, the prevention and control of pollution, and the protection and recovery of biodiversity and ecosystems.

The bond, issued at 1.03% and with a maturity of 20 years, was placed with 464 investors – 91.7% international – with a high participation of pension funds and insurance companies and strong excess demand. BBVA, Banco Santander, Barclays, Crédit Agricole, Deutsche Bank and JP Morgan acted as managers of this issue. The other members of the Bonos y Obligaciones del Estado Market Makers group acted as co-managers. The inaugural green bond issue has been carried out in accordance with the provisions of the Kingdom of Spain’s Green Bond Framework, published in July 2021 and independently verified by Vigeo Eiris.

Spain has therefore joined the explosion of green bonds issued by governments, which last year totalled 16 issues worth 80 billion dollars – around 66 billion euros – according to the latest figures published by the OECD in the last quarter of 2020. More than half of these deals – 56.2% – were issued by EU governments: Belgium, France, Ireland, the Netherlands, Poland, Hungary, Lithuania, and Sweden and Germany – both newcomers to the SSA green bond market. Italy, the UK, Denmark, Ukraine and Slovenia have already announced similar issues, and the Netherlands, France and Germany will also again tap the markets to finance their climate change policies.

The EU itself placed two social bonds in 2020 – one for 10 billion euros for 10 years and another for 7 billion euros for 20 years – to finance actions against unemployment generated by the Covid19 pandemic, in the framework of the Unemployment Risks in an Emergency programme – known as SURE. The final version of the EU’s green bond standard is expected to be published later this year, which has estimated that the financing of NextGen environmental projects alone will lead to €225 billion worth of sustainable emissions.

About the Author

Fernando Rodríguez
Fernando Rodriguez is in charge of PR and Development at The Corner. He has worked for over 30 years for financial publications like Expansion, El Economista, Dossier Empresarial, Ciudadano and Afa Press-Worldfolio and has been a contributor to El Pais-Negocios, Emprendedores, Época, Sector Ejecutivo and Consejeros. Fernando holds a degree in Journalism from CEU-San Pablo (Complutense University) and a master’s degree in Strategic Communication from CESMA business school. As a communication consultant, he has developed PR projects for firms like Grupo Bancaja, JP Morgan, GBS, Corpfin, QBE, Howden, Asociación Española de Leasing y Renting (AELR) or Asociación Española de Accionistas Minoritarios de Empresas Cotizadas (AEMEC).