Munich Re’s placed its first green subordinated bond, which has a volume of $1.25bn, with a coupon of 5.875% that matures in 2042.
The reinsurance giant said that the bond underlined its commitment to the Paris Climate Agreement while supporting its strategic goal of tackling climate change through investment in energy efficiency and renewable energies. It said it would use the capital raised to finance or refinance sustainable projects in accordance with the company’s Green Bond Framework.
Christoph Jurecka, CFO at Munich Re, said: “By successfully placing its first subordinated bond on the US market, Munich Re has impressively demonstrated its attractiveness for new groups of investors. In structuring this bond as a green bond, we are the first European insurer to break such new ground in this market segment. At the same time, the green bond supports the climate targets of our Ambition 2025 strategy.”
Projects included under the green bond, said Munich Re in a statement, include investments of equity and debt in renewable energy, energy efficiency, clean transportation, green buildings, sustainable water and wastewater management, the eco-efficient and/or circular economy, and the environmentally sustainable management of natural resources and land.
This latest green bond launch from Munich Re follows similar issuances in 2020 and 2021.
In 2020, the firm launched its first bond, that one having a volume of €1.25bn. Like this newest issue, the firm said that the proceeds would be used as investments in renewable energies. That bond has a coupon of 1.25% and is scheduled to mature in 2041. According to Munich Re, its Green Bond Framework is aligned with the 2018 Green Bond Principles outlined by the International Capital Market Association.
The firm followed this in September 2021 with a second bond, this time totalling €1bn, with a coupon of 1% and a maturity date of 2042.
All this came after a statement in February 2020 saying that Munich Re had joined the Net-Zero Asset Owner Alliance, an international group of institutional investors that have committed to decarbonise their portfolios to net-zero emissions by 2050.
