Caixa issues €500M in green bonds

State-owned bank Caixa Geral de Depósitos (CGD) is the first bank in Portugal to issue a sustainable bond.

The bank led by Paulo Macedo aims to make €500 million and the finance attracted by the bond issue will be channelled to the “loan operations of its clients in environmental and socio-economic areas”, states the bank in a note sent to the markets.
The operation should be completed by this week, depending on market conditions. It involves the issue of sustainable preferential senior bonds with a six year maturity (2027) with the bank retaining the option to make an early payout at the end of the 5th year (September 2026) according to the presentation made to investors.
“It will be an important milestone in achieving the commitments taken on by CGD in the area of sustainable financing, creating value for its clients and reducing the environmental footprint of its activity”, states the bank.
“The bond issue will contribute towards the eight objectives laid down by the United Nations for Sustainable Development which range from energy efficiency to employment creation in disadvantaged areas,” it adds.
The green bonds issue will have a Baa3 rating from Moody’s which is considered ‘investment grade’.
The issue will not only enable CGD to diversify its sources of financing, but will also open the door for other banks in Portugal to the green and sustainable development ‘green bonds’ market and establish a benchmark price for the other banks to follow.
CGD closed H1 of 2021 with €294 million profits, an increase of 18% on the same period in 2020.