(Bloomberg) — TenneT Holding BV is breathing life into Europe’s limping green bond market with the first ever four-part corporate sale of the notes.
The Dutch power transmission and distribution company is marketing at least 2 billion euros ($2.1 billion) of green bonds maturing in four-and-a-half through to 20 years, according to a person with knowledge of the sale, who asked not to be identified as they’re not authorized to speak. No company has ever issued that many green bonds in one go, according to data compiled by Bloomberg.
Investors are jumping on the sale, placing 6 billion euros of bids so far amid a relative dearth of green corporate issuance this year. Sales through April are 23% down on the same period last year, as issuers step back from raising new debt amid ongoing bouts of global volatility.
TenneT is a regular visitor to the ethical debt market, having priced two green offerings last year, including a 1.8 billion euros three-parter in May 2021. Tuesday’s sale will be the largest green corporate deal since Toblerone and Oreo maker Mondelez International Inc. priced three tranches of green bonds in September, data compiled by Bloomberg show.
“TenneT has a large capex budget to fund, including for energy transition,” said Scott Freedman, a fund manager at Newton Investment Management. “I think there will likely be a lot more to come from the sector in general.”
This year, firms including E.On SE and Iberdrola SA have sold about 11.37 billion euros of green notes through the end of April. Proceeds from TenneT’s sale will fund its updated portfolio of eligible green projects, in line with its previous transactions.
TenneT is offering its 20-year notes at about 130 basis points above mid-swaps, according to the same person familiar. That’s more than double the 67 basis-point spread it paid to sell 20-year green notes a year ago.
A TenneT spokesperson didn’t immediately reply to an emailed request for comment. ABN Amro Bank NV, BNP Paribas SA, Commerzbank AG, NatWest Markets Plc, Banco Santander SA and UniCredit SpA are the bookrunners on the deal, which is expected to price later on Tuesday.
©2022 Bloomberg L.P.
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