In a move towards sustainable finance, CBRE Investment Management (CBRE IM) has successfully closed its third Green Eurobond debt offering in the EMEA region, raising €750 million (c.£641m). This issuance not only signifies the return of the fund to the public debt market since 2021 but also marks the fund’s inaugural issuance of its €3 billion (c.£2.5bn) Euro Medium Term Note (EMTN) Programme.
The “Green bond”, boasting a 10-year maturity and a 4.75% coupon rate, has garnered significant enthusiasm. It was oversubscribed by 3.0x at final terms, with the order book peaking at over €2.4bn (c.£2bn). Reportedly more than 120 unique investor orders flooded in, hoping to participate in this environmentally conscious initiative.
Emphasising the significance of the move, Mark Pennington, fund chief financial officer at CBRE IM, remarked: “We have seen a significant improvement of the bond markets since October last year, and that strong demand for real estate paper has continued in 2024. This bond issuance marks the first diversified core fund to tap the market again since April 2022.”
Over 95% of the deal was allocated to high-quality Tier 1 European investors. Much of the bond has been snapped up by asset managers, bank treasuries, pension funds and insurance companies.
To ensure alignment with its sustainability goals, CBRE IM has structured the bond as a Green bond, with 100% of the net proceeds earmarked for “Eligible Green Projects”. The company shared that these projects would satisfy stringent environmental criteria, contributing to the global effort towards a more sustainable future. Sustainalytics, acting as the second party opinion provider, has assessed and approved the Green Finance Framework for accuracy and integrity.
“The fund is set up to benefit from a wide variety of debt sources, but we clearly prefer the public bond market because of its ticket size and ease of use,” added Pennington.
“Especially now that we have an EMTN Programme, there is a lot of flexibility to pick the best issuance window to do another capital markets funding round. With a large Revolving Credit Facility, the proceeds from the €750m (c.£640m) bond, and a low average cost of debt, the fund is strategically positioned to meet investor requirements while delivering on long-term investment performance objectives.”
CBRE Investment Management’s latest Green bond issuance not only demonstrates its commitment to sustainability but also heralds a new era in green finance, setting a benchmark for environmentally responsible investment strategies.
