Sustainability bond of the year - corporate: Aedifica

Belgian healthcare real estate investment trust (REIT) Aedifica’s €500 million ($590 million) sustainability bond is both green and social, as it is used to refinance environmentally sustainable healthcare assets.

The selection of the bond’s portfolio to include both green and social assets allows its potential inclusion in specific green bond funds and indices, it said.

The bond attracted an order book of €1.8 billion, making it more than 3.6 times oversubscribed, allowing it to tighten its issue by +37 basis points (bps), finally pricing at mid swaps +78 bps.

Issued under Aedifica’s Sustainable Finance Framework the bond will support the company’s focus of housing for seniors with care needs. Second party opinion provider Moody’s ESG Solutions verified that the framework is aligned with the four core components of the Green Bond and Social Bond Principles 2021 as well as the Green Loan Principles 2021.

“The Aedifica Sustainability Bond is a unique offering as it provides investors the opportunity to invest in a product which delivers both a clear environmental as well as social impact in a time where care for an aging population is more important than ever before,” said Dick Ligthart, green bonds and sustainable finance expert at ABN AMRO.

One awards judge described Aedifica’s as an “innovative framework that addresses a space that has arguably been underinvested during Covid”.

ABN AMRO and Morgan Stanley acted as global coordinators on this transaction. Belfius Bank, BNP Paribas and ING joined the global coordinators as active bookrunners.

Aedifica’s transition to healthcare was initiated in 2015, when it changed its tagline from ‘the urban way to live’ to ‘housing with care’.

Deal Highlights

Issuer: Aedifica
Sector: Healthcare real estate
Instrument: Sustainability bond
Issue size: $591.3 million
Maturity date: 9 September 2031
Settlement date: 9 September 2021
Coupon: 0.75%
Lead managers: ABN AMRO, Morgan Stanley, Belfius Bank, BNP Paribas and ING
Use of Proceeds: Green buildings, energy efficiency, healthcare buildings
External review/Second opinion: Moody’s ESG Solutions
Credit rating: S&P (BBB)
Principles/Guidelines: Green and Social Bond Principles