UK investors show big appetite for ING Groep’s first green HoldCo issuance into Sterling market

08 March 2021

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Financing change to create a healthy planet 

ING Groep, headquartered in Amsterdam, is a global bank with a strong European base. Its 57,000 employees serve over 39 million customers, corporate clients and financial institutions in over 40 countries. 
 
Apart from improving its own footprint, reducing Scope 1 and Scope 2 CO2 emissions by 80% by 2022* and 90% by 2030 (based on 2014 emissions),  ING has begun to steer its €600 billion loan book towards meeting the Paris Agreement’s climate goals, naming its strategy the “Terra Approach”.  In doing so, the bank measures the climate impact of its lending activities, in particular for those sectors of its loan book that are responsible for most greenhouse gas emissions, to ensure its lending goes towards companies committed to becoming low-carbon businesses.
 

Green format lures non-UK investors to Sterling market

To tap into the Sterling market and access UK investors, ING Groep chose NatWest Markets as a joint bookrunner for its £800 million short 8NC7 Green Senior HoldCo (Holding Company) bond. 
 
Investor demand quickly led to a final orderbook of nearly £1 billion, with ING Groep achieving a coupon of 1.125%. While UK investors took 65% of the allocations, a number of European investors, who so far haven’t held a lot of Sterling holdings, decided to participate because of the green nature of the transaction. 
 
ING Groep opted to use the Sterling Overnight Index Average (SONIA) index for this bond, becoming the first financial institution to do so for a senior callable* Sterling bond.
 
The proceeds of the Green Senior HoldCo will be used for ING Groep’s “Eligible Green Loan Portfolio”, which lends to firms in green sectors such as renewable energy, green buildings and sustainable water management.
 
This was ING Groep’s second Senior HoldCo in 2021 after the €1.5 billion Senior HoldCo issued in January and marked the bank’s first Sterling HoldCo in Green format. In June last year, NatWest Markets acted as joint lead manager when ING Groep attracted US institutional investors when it tapped the US market for its $1 billion Green Senior HoldCo, which was the first $ HoldCo in callable format for the Dutch bank, following their last bullet $ HoldCo issue in April 2019, and their first Green $ HoldCo dating back to November 2018.
 

ING issuance reflects NatWest’s commitment to support lending to green activities

Commenting on the transaction, Caroline Haas, NatWest Markets, said: “We’re delighted to have again supported ING Groep raise funding for its green loan portfolio and to successfully convey ING Groep’s climate strategy to UK investors. This issuance reflects NatWest’s commitment to support those on their journeys towards sustainable operations and those, such as ING Groep, spotlighting others climate-related ambitions.”
 
*A callable bond, also known as a redeemable bond, is a bond that the issuer may redeem before it reaches the stated maturity date
 
Finance is subject to status. Security may be required. Product fees may apply.

 

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