Binder Grösswang advises VERBUND AG on the issuance of green and sustainability-linked notes
Binder Grösswang advised VERBUND AG on their issuance of innovative green and sustainability-linked notes with a volume of €500 million. The notes combine the feature of environmentally sustainable ("green") use of proceeds with a coupon step-up linked to company-wide sustainability goals ("sustainability-linked").
The notes have a twenty-year-term and a coupon of 0.900% and are linked to clearly defined sustainable targets: (i) the newly-installed production capacity of renewable energy of hydropower, wind power and photovoltaic (PV) of VERBUND AG (including its subsidiaries) reached at least 2,000 MW and (ii) the additionally installed transformer capacity of VERBUND AG (including its subsidiaries) reached at least 12,000 MVA. Both sustainable targets shall be reached by 31 December 2032. If VERBUND AG fails to achieve the sustainable targets by this date, the original rate of interest will be increased by 25 basis points up to the maturity date ("sustainability-linked step-up").
VERBUND AG will allocate an amount equal to the net proceeds to certain green projects. On a best effort basis, VERBUND AG aims to complete such allocation within three years of the issuance of the notes. These green projects, modernisation of certain grid systems in Austria and the refurbishment and extension of the existing hydropower plant "Töging-Jettenbach" in Germany comply with VERBUND AG’s Green Financing Framework.
VERBUND AG’s Green Financing Framework has been developed in alignment with the Green Bond Principles 2018 and the Sustainability-Linked Bond Principles, 2020. It also aligns with the most recent draft of the Delegated Acts of the EU Taxonomy, published in November 2020.
Investors with a proven focus on sustainability represented more than 90% of the final order book. The Notes where oversubscribed by factor four.
The Binder Grösswang team consisted of partners Emanuel Welten, Tibor Fabian and Florian Khol and attorney Philipp Tagwerker in Capital Markets.