ADCB prices $500m Reg S green bond to support financing of low-carbon initiatives

Abu Dhabi Commercial Bank (ADCB) has successfully priced its inaugural green bond, which will be issued on September 12, 2022, raising $500m to support the financing of low-carbon initiatives.

The five-year bond, priced at a spread of 115 basis points above treasuries with a 4.5 per cent coupon rate, was 3.8 times oversubscribed after attracting a range of local, regional, and international investors that placed total orders of over $1.9bn.

The strong investor demand follows a global roadshow and reflects confidence in ADCB and its approach to managing ESG risks and opportunities, according to a report published by the state news agency, WAM.

The bank has aligned its sustainability approach to the UAE’s ambitions for an inclusive, net-zero economy. Commitments include providing Dhs35bn in green finance by 2030, reaching net-zero in the bank’s own operations and reducing financed emissions in line with UAE government net-zero ambitions.

The bank has adopted a ‘Green Bond Framework’ to provide a long-term platform to support further mobilisation of capital for green projects.

The favourable pricing for ADCB’s green bond was supported by its credit ratings of A/Stable/A-1 from S&P and A+/Stable/F1 from Fitch.

MSCI has assigned an ‘AA’ rating for ESG, while the bank is categorised as ‘Medium risk’ by Sustainalytics.

The proceeds of the bond issuance will further support financing of a low-carbon economy in line with criteria set out in the framework. Initiatives eligible for green loans include projects or companies associated with renewable energy, green buildings, sustainable water and wastewater treatment, clean transportation, energy efficiency, pollution prevention and control.

The framework, which aligns with the United Nations Sustainable Development Goals and based on the International Capital Markets Association (ICMA) Green Bond Principles, is governed by a cross-functional Green Bond Working Group reporting to an executive-level Sustainability Committee.

ADCB has also obtained a ‘Second Party Opinion’ to externally verify the sustainability quality of the framework and alignment with ‘Green Bond Principles’.

In other news, Abu Dhabi Commercial Bank (ADCB) has announced its financial earnings for Q2 and H1 2022. In the period ended June 30, the bank made a net profit of Dhs3.059bn, an increase of 21 per cent year-on-year (YoY).

Read: ADCB reports 21% rise in net profit to Dhs3.059bn in H1 2022