Abu Dhabi Commercial Bank (ADCB) has successfully priced its inaugural green bond, which will be issued on September 14, 2022, raising $500 million to support the financing of low-carbon initiatives.
The five-year bond, priced at a spread of 115 basis points above treasuries with a 4.5 per cent coupon rate, was 3.8 times oversubscribed after attracting a range of local, regional, and international investors that placed total orders of over $1.9 billion. The strong investor demand follows a global roadshow and reflects confidence in ADCB and its approach to managing ESG (environments, social and governance) risks and opportunities.
Commitments include providing Dh35 billion in green finance by 2030, reaching net-zero in the bank’s own operations and reducing financed emissions in line with UAE government’s net-zero ambitions.
The favourable pricing for the green bond was supported by the bank’s strong credit ratings of A/Stable/A-1 from S&P and A+/Stable/F1 from Fitch. MSCI has assigned an ‘AA’ rating for ESG, while the bank is categorised as ‘Medium risk’ by Sustainalytics.
The proceeds of the bond issuance will further support financing of a low-carbon economy. Initiatives eligible for green loans include projects or companies associated with renewable energy, green buildings, sustainable water and wastewater treatment, clean transportation, energy efficiency, pollution prevention and control.