AIB has raised €750m from the issuance of its fourth green bond, proceeds from which will be used to finance green projects and strengthen the lender's capital position.
The majority state-owned bank has now raised €3.25bn from issuing environmental bonds to date, having become the first Irish bank to issue a green bond in 2020, and that latest issuance came as world leaders gathered in Egypt for COP27.
AIB also issued the first social bond from an Irish bank in May, raising €1bn.
Investor interest in the latest green bond peaked at just shy of €1.5bn on Wednesday, allowing the bank to issue the bond at a level of MidSwaps +2.85%, equating to a coupon of 5.75%.
The final order book was €1.4bn, comprising 94 investors, spread across 22 countries globally, with participation from both environmental, social and governance (ESG) focused investors and many of the leading international investment managers.
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"As Ireland’s largest financial services provider with 2.8m customers, AIB is already actively supporting the transition to a low-carbon future by reducing our own carbon footprint and helping our customers to do the same," said Colin Hunt, CEO of AIB. "We aim to play a significant role in helping the government and the European Union meet their carbon reduction targets.
"Our ambition is that 70% of new lending will be green or transition by 2030. And we are making great progress towards achieving that goal as green lending already increased to 24% of new lending in the first nine months of the year.
"The more green lending we do, the more green capital we can attract as ESG investors increasingly want to invest in companies with strong green credentials. The success of this transaction recognises our position as a national champion with a very strong capital and financial position and our ongoing commitment to our sustainability goals."
In order to be labelled green, the AIB bond must comply with the International Capital Markets Association’s Green Bond Principles governing the use of the bond proceeds and related transparency and reporting requirements.
The state raised €400m this week when selling 135m shares in AIB, reducing its stake in the lender from 62% to 57%.
(Pic: Aidan Crawley/Bloomberg via Getty Images)
