Environmental Finance's Bond Awards 2022

Green bond of the year - agency: KfW

With a $3 billion issuance, the launch of KfW's five-year green bond became the largest US dollar-denominated green bond across all sectors.

The bond, issued in 2021 was 3.7-times oversubscribed. Its final orderbook of more than $11 billion was the largest for a US dollar green bond in the sub-sovereign, supranational and agency (SSA) sector.

Tim ArmbrusterIt had more than 120 investors, largely dominated within the Europe, Middle East, Asia region, with 83% of these being identified as 'green' investors.

Some of its proceeds contribute to two KfW promotional loan programmes, which provide energy-efficient homes and renewable energy projects in Germany and abroad.

KfW said that these "make a significant contribution to the German government's climate action measures".

The projects financed by the bond have helped to avoid 280,000 tonnes of greenhouse gas equivalent emissions per annum.

The scale of the bond was a key factor in the decision of the Environmental Finance Bond Award judges. "It breaks so many records for the size and proportion of green. The size of the issuance in US dollar helps give further impetus to that market".

They added that the disclosures of its ESG rating "helps set the standard for others to follow".

Tim Armbruster, KfW treasurer, said: "We have been issuing large, liquid US-dollar green bonds for eight years, but this record bond is the highlight for us for the time being. With the record volume and remarkable pricing, we have shown that there is a deep market for this product.

"It is the rapidly growing global demand from 'green' investors that allows us to issue landmark transactions like this. For the green bond market, this could give impetus to take a closer look at the dollar market. After all, green bonds are still more entrenched in the euro market than in the US-dollar market."

Deal highlights

Issuer: KfW
Size: $3 billion
Maturity: 2026 (5 year)
Coupon: 1.0%
Use of proceeds: renewable energy and energy efficiency projects
External reviewer: Cicero
Lead managers: Bank of America, HSBC and TD Securities
Credit Rating: Moody's (Aaa) Scope (AAA) and S&P (AAA)
Other highlights: Largest USD-denominated green bond