02 April 2019
Deutsche Kreditbank (DKB) issued the first ever social Pfandbrief, raising €500 million ($588 million).
The Berlin-based lender had previously issued green-labelled bonds but its social Pfandbrief transaction made DKB the first commercial bank to issue both green and social bonds.
Its inaugural social transaction had an impressive market response following a pan-European roadshow. About a third of the buyers of the paper were classified as "ESG investors".
The Social Bond Programme allows the proceeds of DKB's social bonds to be used for social housing, healthcare, public transport, education & research, and social inclusion.
Issuer: Deutsche Kreditbank
Size: €500 million
Maturity: September 2028
Use of proceeds: Affordable basic infrastructure
Credit rating: Aaa (Moody's)
Lead manager: ABN AMRO, Bayern LB, Commerzbank, Crédit Agricole CIB, DZ Bank
Other highlights/ notable features: First Social Pfandbrief
The programme has a volume of around €1.5 billion consisting of around 400 single loans/projects and aligns with the Social Bond Principles, according to ISS-oekom, which gave a second party opinion.
The framework aligns with 11 of the 17 Sustainable Development Goals, including quality education, clean water and sanitation, innovation and infrastructure and reduced inequalities. ISS-oekom has awarded DKB the status of 'Industry Leader' for four years in a row.
"DKB's Social Bond programme was the next logical step following the path of sustainable funding", comments Armin Hermann, head of Treasury. "Thanks to our business strategy the spectrum of eligible projects in our portfolio is huge and we were able to provide a framework which was well received by investors. This award is an achievement of all business units involved at DKB".
DKB is an active member of the Social Bond Working Group which contributed substantially to the development of the Social Bond Principles.