Rabobank Groep’s Obvion NV is planning to sell its first green bonds backed by mortgages on energy-efficient homes, as it seeks to capitalize on investor demand for securities with an environmental bent.
The Dutch mortgage lender began marketing the euro-denominated securities on Monday, according to Executive Director and Treasurer Max Bronzwaer. The bonds are part of Obvion’s residential mortgage securitization program known as Storm, which has about 27 billion euros ($30 billion) of outstanding securities, according to Bronzwaer.
Bonds that finance environmentally friendly projects have been touted in the fight against climate change, with Bloomberg New Energy Finance forecasting almost $56 billion of the debt may be issued this year, topping last year’s $46 billion record. ABN Amro Group NV sold green bonds Monday and TenneT Holding BV is planning a sale, according to people familiar with the offerings, while Apple Inc. sold $1.5 billion of the securities in February.
“This is a pioneering transaction targeted at green investors,” Bronzwaer said in an interview. “Our aim is that it will not be a one-off. There is investor appetite for this type of bond.”
Heerlen, Netherlands-based Obvion intends to complete a sale within weeks after meetings with investors in Europe, Bronzwaer said. The bonds will have a maturity of about five years and will be structured in line with other notes in the Storm program. Obvion’s green bonds will include mortgages on homes that have certified energy-efficiency levels, he said.
“For an investor, there is instant proof of the green asset behind the bonds because of the existing official energy label,” said Rachelle Rijk, head of funding and balance sheet management at Obvion.
Increased scrutiny about what constitutes a “green bond” has made companies cautious about participating in the market, HSBC Holdings Plc said in March. Bank of England Governor Mark Carney said green securities are key to delivering the trillions of dollars a year needed to curb greenhouse gases.