Banco BPM Issues €500 Million European Green Bond, Expanding ESG Portfolio to €7.5 Billion

Banco BPM has successfully completed the issuance of a European Green Bond Senior Non-Preferred, with a six-year maturity and an early repayment option in October 2030, for an amount of 500 million euros.

Orders, coming from over 110 investors, peaked at 2.4 billion euros and allowed the operation to be carried out with the lowest spread ever since the Banco BPM Group was founded.

The bond was issued by Banco BPM at a price of 99.799% and pays a fixed coupon of 3.125%

The bond, which is reserved for institutional investors, was issued under the issuer’s Euro Medium Term Notes Programme and has an expected rating of Baa3/BB+/BBB-/BBB (Moody’s/S&P/Fitch/DBRS).

Banco BPM was the first financial institution to issue a European Green Bond in Italy and the second in Europe. The proceeds will be used to finance or refinance eligible green loans aligned with the European Taxonomy, as defined in the Factsheet itself. Specifically, the funds raised will be used primarily to refinance mortgages for the purchase, renovation, or construction of buildings aligned with the European Taxonomy standards.

The issuance of this new green funding instrument increases Banco BPM’s total ESG issuances to 7.5 billion euros

The investors who participated in the operation are mainly asset managers and fund managers (57%), insurance companies and pension funds (26%), banks (7%), while the geographical distribution shows the prevalent presence of foreign investors (including France with 32%, Benelux with 12%, Ireland and the United Kingdom with 12%) and Italy with 22%.

Significant participation was shown by “dark green” investors, i.e. investors with highly sustainable investment profiles, who received 70% of the allocation.

With this transaction, Banco BPM further strengthens its position as a pioneering issuer in the sustainable bond market and underscores its outstanding domestic and international investor base. Banca Akros (a related party of the issuer), Commerzbank AG, Crédit Agricole CIB, IMI – Intesa Sanpaolo, JP Morgan, NatWest Market, and Societe Generale acted as joint bookrunners.

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(Featured image by Eglantine Shala via Pixabay)

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