Abu Dhabi: The UAE’s clean energy producer Masdar announced the completion of its first green bond issuance for $750 million 10-year senior unsecured Notes.
“There was a strong appetite from regional and international investors with the order book peaking at $4.2 billion, that is an oversubscription of 5.6x,” Masdar said in a statement on Wednesday. Pricing tightened 35bps between launch and final terms, with a final landing spread of 115bps over US Treasuries and a coupon of 4.875 per cent. Allocation was finalized with a split of 87.5 per cent to international investors and 12.5 per cent to MENA investors.
Net proceeds from this bond and future offerings will be used to invest exclusively in ‘dark green’ renewable energy projects, many of which will be in developing economies and climate-vulnerable countries that have a critical need for investment.
It is vital to make finance more available, accessible and affordable for developing economies if we have any chance of meeting climate goals to supercharge sustainable development.
“Ahead of the UAE hosting the UN climate change conference, COP28, we must champion initiatives that advance climate finance and decarbonization,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Chairman of Masdar and COP28 President-Designate. “Today, the successful issuance of Masdar green bonds will support these twin aims, by helping to provide funding towards renewable energy projects where they are needed most.”
This bond is the first part of a program to raise up to $3 billion of bonds to meet Masdar’s equity funding commitments on new renewable energy projects at home and overseas, as it seeks to grow its global portfolio to 100GW of capacity by 2030. According to the announcement, proceeds from all bond offerings under the program will be deployed towards the greenest projects in the renewables sector, namely solar, wind, renewable power transmission and distribution infrastructure, and battery storage assets, and strict ESG criteria will apply to restrict the eligibility of projects.
The bond was rated A2 by Moody’s and A+ by Fitch, in line with the corporate credit ratings of the company, and was priced at a coupon rate of 4.875 per cent with maturity on July 25, 2033.
