TenneT lights up the market with jumbo €1bn Green Bond

We’re proud to have been able to support TenneT with their largest senior tranche to date, making them the 3rd largest European corporate green bond issuer.

TenneT

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Connecting everyone with a brighter energy future

As the first cross-border transmission system operator (TSO), TenneT ensures a secure supply of electricity to more than 42 million end-users in the Netherlands and in a large part of Germany through its approximately 24,000 kilometres of high-voltage connections. 

Investing a record sum of €3.4 billion in 2020, TenneT, which has nearly 6,000 employees, is one of Europe’s largest investors in national and cross-border transport capacity on land and at sea, bringing together the Northwest European energy markets and driving the energy transition in Europe. By 2030 TenneT expects to have realized approximately 28 gigawatt (GW) of connection capacity for offshore wind farms in the Dutch and German parts of the North Sea, transmitting an amount of electricity sufficient to support the energy usage of approximately 28 million households.

The company’s strong sustainability commitment is also reflected through its ESG rating profile with solid ratings of ISS-ESG: B / Prime; Sustainalytics: 17.9/Low Risk; and Standard & Poor's: 84/100 / Strong; placing Tenne T in the top 1st percentile of ESG ratings for Gas and Electricity Network Operators.

TenneT becomes third largest European corporate Green Bond issuer

Known as one of the oldest corporate Green Bond issuers, launching its first green transaction in 2015, and since issuing green debt across different formats, TenneT was looking to sell its largest senior tranche to date, a €1bn Green Bond, and turned to NatWest to support with this transaction in the role of Active Bookrunner – a role in which the NatWest team had delivered before for TenneT in nine capital markets transactions.

A fast-growing orderbook after the deal announcement allowed the TSO to tighten the bond’s price considerably. The final order volume of €1.9 billion for the bond, which priced with a coupon of 0.875%, came from high-quality, well diversified investors across the UK and Europe. In its additional role as Billing and Delivery (B&D) bank, the NatWest team also helped Tenne T with the allocation of the bond, focusing on strong ESG and/or ’dark green’ investors.  

After this transaction, TenneT is now the 3rd largest European corporate green bond issuer with currently approximately €13 billion of green debt outstanding. The company will use the bond’s proceeds to invest in eligible green power transmission projects in the Netherlands and Germany focused on connecting large-scale offshore wind farms to the onshore electricity grid and enhancing the onshore transmission capacity for renewable energy. Further details on these projects and the project selection process are set out in TenneT’s updated Green Financing Framework, which allows the company to use a variety of sustainable finance instruments, such as Green Private Placement, Hybrids Bonds and Green Senior Bonds. ISS ESG provided a Second Party Opinion (SPO) for the Framework, confirming the framework aligns with the ICMA Green Bond Principles.

TenneT’s Green Bond marks 9th deal with NatWest Markets at their side

Michiel de Bruijn, Executive Director Corporate Coverage – Netherlands & Belgium at NatWest, commented: “We are delighted to have been able to support TenneT with their jumbo Green Bond. Despite tougher market conditions, the success of this transactions highlights investors’ strong confidence in the quality and resilience of TenneT’s sustainability and credit story.”

Dr. Arthur Krebbers, Head of Sustainable Finance Corporates at NatWest, said: “We are proud to have been at TenneT’s side for this highly successful issuance, marking the 9th deal we have led for our customer TenneT since 2011. As a purpose-led bank and sponsor of COP26, NatWest is determined to help customers like TenneT lead the transition towards a low carbon economy.”

Jaspreet Singh, Associate ESG Advisory at NatWest, mentioned: “We are very pleased with the strong reception TenneT received for their jumbo Green Bond and the wider recognition of TenneT’s commitment to deliver solutions for the decarbonisation of the energy world and contribute to climate change mitigation.”

Gerard Kits, Head of Treasury at TenneT, said: “With our annual planned investments expected to further grow in the coming years, this Green Bond is a key milestone for us, and we are very pleased with the continued strong investor support we receive. TenneT is heavily investing in the energy transition in Europe, making an important contribution to meet national climate targets and to connect everyone to a brighter energy future.”

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