Environmental Finance's Bond Awards 2023

Award for innovation - use of proceeds (social bond); Social bond of the year - corporate: Vonovia

Access to affordable housing is an issue across Europe and so addressing it requires a multinational response. These two awards acknowledge the work of European multinational real estate company Vonovia in this space.

The German-headquartered firm owns approximately 550,000 apartments in Germany, Sweden, and Austria.

The €1.65 billion ($1.7 billion) dual tranche social bond (3.85 year and 6.25 year) utilised screening criteria related to affordable housing in Germany and Sweden.

One Bond Awards judge praised Vonovia's "innovative screening programme" which was developed in partnership with investors.

Fabian LanderJudges were also impressed with the innovative way that Vonovia was able to navigate the above while undertaking a merger.

Vonovia published its first green bond framework in 2021, the same year it purchased German property company Deutsche Wohnen, which had its own green bond framework in place.

Judges noted the efforts made to harmonise and update the two frameworks.

This work demanded both close cooperation across divisions within one company and in parallel across two legally independent companies, with two independent leads representing each of the departments at each level.

Ultimately, the new framework resulted in the alignment of the group's green building eligible assets with the stringent criteria of the EU taxonomy and expanded the use of proceeds categories to include social categories at the same time.

Another Bond Awards judge praised the firm's use of proceeds and its "unique structure with benefits in multiple countries" alongside its solid impact reporting.

The transaction was four-times oversubscribed which gave Vonovia the confidence to issue its first Social SEK-denominated bonds soon afterwards.

The proceeds from the social bonds will be invested in social projects. This will include housing for low-income households and those with rents that are at least 15% lower than the standard local comparative rent charges.

Dr Fabian Lander, head of corporate finance at Vonovia, said: "We are delighted to be awarded these two Environmental Finance Bond Awards for 2023. They recognise Vonovia's exceptional performance in a challenging market environment.

"Our innovative approach and dedication to sustainable financing have helped us expand our investor base.

"The successful issuance of €2.5 billion green and social bonds in March 2022 is a testament to our commitment to social responsibility and sustainability, reinforcing our position in affordable and low-barrier housing solutions.

"With our focus on social investments, green and social bonds are the perfect instruments to allocate capital to this important cause. We are excited to continue our commitment to a sustainable future, and we thank the Environmental Finance Bond Awards for this recognition."