On Wednesday, 6th November 2013, FMO priced its successful inaugural Sustainability Bond, a 5-year EUR 500 million RegS transaction. Through this transaction, FMO confirms its commitment towards environmental and socially responsible funding and the development of the Sustainability Bond market.
The proceeds of the Sustainability Bond support the financing of Green and Inclusive Finance Projects according to FMOs Sustainability Bonds framework, which is aligned with FMOs long term strategy of inclusive and green growth. Projects to be financed include those in renewable energy generation, energy efficiency, responsible agriculture, food production, forestry, transport, water supply and access, as well as Microfinance Institutions (MFIs) and Micro, Small & Medium-sized Enterprises (MSMEs).
Given the strategic nature of this transaction, FMO announced mid October the intention to hold a series of investor meetings in Europe with a Sustainability Bond issue to potentially follow up. With a strong market backdrop and limited competing supply, the transaction was announced on Tuesday 05 November in the European afternoon. Books for a EUR 500 mio no grow transaction opened shortly after 10am CET on Wednesday with a spread guidance of mid-swaps +12/+14 bps, after collecting more than EUR 500 mio in IoIs at IPTs of Mid-Swaps+15bps in the early morning. The final spread was set at Mid-Swaps +12bps only 15 minutes afterwards due to the strong momentum. The order book closed at 10.25am CET in excess of EUR 1.2bn. The Sustainability Bond subsequently priced at Mid-Swaps +12bps, which offered an attractive spread for investors keen on sustainability exposure from a rare Dutch AAA Agency, especially taking into account the long-term commitment and strong financial backing of the Dutch State to FMO.