On Monday 25 May 2020, the Luxembourg Stock Exchange (LuxSE) and EUROFIMA announced the admittance of EUROFIMA’s new 10-year, €750 million green bond for trading and listing on LuxSE’s regulated market and subsequent display on the Luxembourg Green Exchange (LGX).
The new bond issuance is EUROFIMA’s third green bond, and its second biggest green bond to date. The bond was significantly oversubscribed by investors eager to tap into a green bond market that saw a significant decrease in supply in the first quarter of 2020. The proceeds of the bond will be used to provide lending to European railway companies, and is earmarked for investment in electric passenger transport.
Towards a low-carbon future
“We are proud to count EUROFIMA among our sustainable issuers and we support EUROFIMA in its efforts to further develop environmentally-friendly railway transportation in Europe. The economic recovery from the Covid-19 pandemic must be green, and as we bring our societies and economies back to life, we should all focus on sustainable renovation,” said Julie Becker, Deputy CEO of LuxSE and Founder of LGX.
LuxSE has long been the leading listing venue for securities issued by sovereigns, supranational and agencies. After establishing LGX in 2016, a platform exclusively dedicated to sustainable securities, LuxSE has emerged as the preferred listing venue for the thematic bonds issued by leading institutions and multilateral development banks active in sustainable development worldwide.
EUROFIMA is one of Europe’s longest standing supranational organisations and specialises in the financing of rolling stock, such as locomotives, wagons and other railway vehicles. EUROFIMA supports the sustainable development of railway transportation across Europe, by providing loans to help railway bodies modernise their rolling stock. So far, the supranational entity has provided more than 3,000 loans.
“This benchmark green bond marks an important step forward for EUROFIMA and the future of European railways. By securing funding for electric passenger transport through our lending model, we are not only contributing to creating a greener world, but also helping our members constantly modernise and improve the travel experience they offer to millions of customers,” said Harry Müller, Chief Operating Officer of EUROFIMA.
The non-profit supranational is based in Basel, Switzerland and was established in 1956 as part of an international treaty. Today, EUROFIMA counts 25 member states and their respective public railway companies, including Deutsche Bahn, SNCF, FS and the Luxembourg National Railways, CFL.
Uptick in social
The COVID-19 pandemic has led to an increase in social bond issuance addressing the devastating social and economic consequences of the global virus outbreak. In the first four months of 2020, LGX displayed 78 new instruments worth a total of €50.7 billion, and only 23% of these sustainable debt instruments were green bonds. The remaining securities were social and sustainability bonds. EUROFIMA’s benchmark green bond is one of several recent green bond issuances that may indicate that last year’s growth in new green bond issuance could continue in 2020.