Abu Dhabi Future Energy Company (Masdar) has announced the successful completion of its first green bond issuance of $750 million 10-year senior unsecured notes.
The debut green bond demonstrates investor confidence in the financial strength of Masdar, which has credit ratings of A2 (Moody’s) and A+ (Fitch), and its strong sustainability credentials.
In line with Masdar’s Green Finance Framework, net proceeds from this bond and future offerings will be used to invest exclusively in “dark green” renewable energy projects, many of which will be in developing economies and climate-vulnerable countries that have a critical need for investment.
According to the statement, “The orderbook peaked at $4.2 billion supported by heavy demand from regional and international investors, i.e. oversubscription of 5.6x. Pricing tightened 35bps between launch and final terms, with a final landing spread of 115bps over US Treasuries and a coupon of 4.875 percent. Allocation was finalized with a split of 87.5 percent to international investors and 12.5 percent to MENA investors.”
“The success of this debut green bond issuance is a testament to the pioneering spirit of all the people who have worked incredibly hard over the last 17 years to grow Masdar into one of the world’s leading renewable energy companies. We are thankful for the trust that the financial community has placed in us and we look forward to the involvement of many top-class investors in our journey towards delivering renewable energy and accelerating the net-zero transition around the globe.”
Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Chairman of Masdar and COP28 President-Designate, said that, “It is vital to make finance more available, accessible, and affordable for developing economies if we have any chance of meeting climate goals to supercharge sustainable development.”
“Ahead of the UAE hosting the UN climate change conference, COP28, we must champion initiatives that advance climate finance and decarbonization. This successful issuance of Masdar green bonds will support these twin aims, by helping to provide funding towards renewable energy projects where they are needed most,” Mr. Al Jaber added.
Mr. Niall Hannigan, Masdar’s Chief Financial Officer, commented that the proceeds from our inaugural bond offering will be deployed in developing new renewable energy projects around the world.
Masdar’s Green Finance Framework, established in February 2023, was updated in May 2023 to reflect changes to the Green Loan Principles. Moody’s has issued a Second Party Opinion on the Green Finance Framework.