news - FMO successfully issues USD 500 million 5-year Inaugural Green Bond


FMO successfully issues USD 500 million 5-year Inaugural Green Bond

February 14, 2019

Final Terms



Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO)


Aaa (stable) / AAA (stable)


Fixed Senior Unsecured Notes


USD 500 million


2.750% (Annual)

Pricing Date

12th February 2019

Payment Date:

20th February 2019

Maturity Date:

20th February 2024

Reoffer Spread:

Mid-swaps + 17bps

Reoffer Price / Yield:

99.950% / 2.742% (s.a.), 2.761% (annual)

Reoffer Spread to UST:

UST 2.500% 31 January 2024 + 25.6bps

Joint Lead Managers:

BofA Merrill Lynch, Citi, Credit Agricole, HSBC

Issue Highlights:

  • On Tuesday 12th February 2019, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. ("FMO"), rated Aaa/AAA, priced a new USD 500 million 5-year Green bond at mid-swaps plus 17 bps. This is equivalent to 25.6 bps over the on-the run- 5-year US Treasury and a reoffer price of 99.950%. This transaction marks FMO's inaugural Green Bond issuance, having previously pioneered the Sustainability Bond market in The Netherlands with three EUR-denominated, and one SEK-denominated, sustainability bond issuances.
  • On Thursday 24th January at 10:25am London time, FMO announced a series of investor calls and physical meetings across Europe on the week beginning 4th February to engage investors and gather feedback on a USD denominated Reg S Bearer GReen Bond transaction. FMO took advantage of strong investor feedback and the issuance window following the Chinese Lunar New Year holidays to announce the new 5-year transaction at 1:00pm London time on Monday 11th February 2019, with Initial Price Thoughts ("IPTs") of mid-swaps +18bps area.
  • The orderbook officialy opened the following day at 8:05am London time, with Price Guidance remaining unchanged at mid-swaps plus 18bps area. The orderbook grew throughout the London morning and reached in excess of $540 million (excluding Joint Lead Manager interest) by 9:42am London time. The momentum continued and with books in excess of $725 million, FMO were able to set the final spread at mid-swaps plus 17bps, representing a one basis point tightening from IPTs. The transaction subsequently priced at 2:54pm London time.
  • The reward for FMO's broad investor work was reflected in the transaction's very high quality and diverse orderbook supported by strong demand from green motivated investors. Bank treasuries took 51% of allocations, followed by central banks & official institutions (31%), asset managers (15%), insurance and pension funds (2%) and private banks (1%).
  • Investors based in UK & Ireland took 30% of allocations, followed by supportive investors in the Nordics (21%), Benelux (10%), Germany, Switzerland & Austria (9%), France (7%) and other European countries (3%). Offshore US (18%) and Asia (2%) made up the remaining allocations.
  • The net proceeds of the issue will be allocated within FMO's Treasury to a special sub-portfolio that will be linked to FMO's lending operations in the field of green finance ("Eligible Projects").
  • FMO's definition of green projects focuses on climate-related projects by defining three sub-categories under green eligible projects: climate change mitigation, climate change adaptation and other footprint projects. Eligible Green Projects include, but are not limited to, investments in:
  • Renewable energy projects such as solar, wind geothermal power and run-of-river hydro
  • Energy efficiency projects in buildings and in industrial equipment
  • Agriculture, forestry and other land use
  • Responsible agriculture, food production, transport, waste and wastewater projects (including bioshpere conservation projects)

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