Danske Bank have acted as an active bookrunner on a EUR 500m 11-year green bond issue for the Electricity Supply Board (ESB). The transaction represents the very first EUR green bond transaction for an Irish corporate and thereby supports Ireland’s transition to a low-carbon economy.
ESB is a state-owned, vertically-integrated electricity utility, and the largest energy utility on the island of Ireland.
After interacting with more than 100 investors on a well-attended roadshow that included physical meetings in Amsterdam, Paris, Frankfurt and London as well as 1-on-1 calls with a focus on Nordic accounts, the company decided to announce the transaction in the morning on 4 June with initial price thoughts of Mid-Swap (MS) +110bp area.
The order book grew steadily over the next two to three hours to more than €3.4bn, which allowed the guidance to be tightened by 25bp to MS +85bp +/-2bp (will price in range). Price sensitivity was very limited, also aided by the green format, and the book continued to grow to around €4.1bn when final pricing was set at the tight end of guidance, corresponding to a new issue premium of just 2bps.
“The final order book was of very high quality, counting more than 200 investors, including several dedicated green investors as well as new investors to the ESB credit. Participation was well diversified with the largest buyers coming from France and the UK while Nordic accounts also participated with good orders. With this transaction, ESB has successfully established a solid foundation for its future Green Bond programme, and we are very proud to have been part of this strategically very important transaction for ESB,” says Jens Frederik Nielsen, Global Head of IG Corporate Origination.ESB’s decision to diversify its investor base, with approval from the Irish Government, opens new funding channels for climate change action, which is a key milestone towards the company delivering on its ‘Brighter Future’ strategy. This aligns with the Government’s National Development Plan, which articulates Ireland’s ambitions with regard to building a sustainable, low-carbon society.
About the Electricity Supply Board (ESB)
Founded in 1927, the Electricity Supply Board (ESB) is the vertically-integrated state-owned electricity utility which owns the Regulated Network Assets on the island of Ireland as well as Generation, Trading and Supply businesses.
ESB's Brighter Future strategy is anchored in its ambition to lead Ireland’s transition to a low-carbon energy future based on clean, reliable, affordable electricity. ESB targets a 50% reduction in carbon intensity by 2030.