The M&G European Property Fund has completed its first green bond issue worth 500 million euros, a transaction that broadens its sources of funding to undertake new investments, acquisitions and refinancing. The fund, which has assets under management of 5.4 billion, currently holds 2.4 billion in assets that meet the requirements of its Green Financing Framework.
The issue received orders totalling more than €2.1 billion from 120 international investors and was 2.8 times oversubscribed at the time of final pricing. The bond has a five-year maturity and was placed with a spread of 100 basis points.
The proceeds raised will be used to finance or refinance assets and projects that meet the environmental criteria established by the fund, as well as to support future investment opportunities. The framework used to select these assets has been rated ‘Excellent’ by Sustainable Fitch, whilst Fitch Ratings has assigned the vehicle an issuer rating of A- with a stable outlook.
The transaction follows the fund’s commitment of over €1 billion to eleven acquisitions over the past year, concentrated mainly in the logistics and residential sectors. Its strategy also includes offices and retail, with a portfolio spread across twelve European markets.
The bond has been issued under a new EMTN programme for a maximum amount of €3,000 million. ABN AMRO, BBVA, HSBC and ING acted as joint bookrunners, whilst EY-Parthenon advised the fund on debt matters. Slaughter and May and Clifford Chance provided legal advice on the transaction.
