Bond Awards 2020

Award for innovation - use of proceeds (sustainability bond) - Intesa Sanpaolo

IN NOVEMBER 2019, Italian bank Intesa Sanpaolo issued its first ever sustainability bond, focused on financing the circular economy.

Alessandro LolliIt had previously issued a green bond in 2017. Its new sustainability bond framework allowed the bank to issue bonds to fund new and existing loans/projects and businesses financed under its dedicated €5 billion credit facility to support the transition towards a circular economy (CE Plafond).

The platform finances the following activities, developed in partnership with the Ellen MacArthur Foundation – a UK-based circular economy charity:

  •  Solutions that extend the product-life or cycles of use of goods and/or materials.
  • Production processes fueled by and/or products made of renewable or recycled resources.
  • Products and/or services that significantly increase effectiveness and efficiency of the resources consumption, within the company or along its supply chain.
  • Design and/or manufacture products that can be fully recycled or composted within an efficient framework of collection, separation and recycling after use.
  • Innovative technologies to enable circular business models.

Orders reached over €3.5 billion ($3.9 billion), with strong demand from green and environmental, social and governance investors. Intesa Sanpaolo placed €750 million of bonds at a fixed rate of 0.75%, with a five-year maturity.

Deal highlights:

Issuer: Intesa Sanpaolo
Date of issue: November 2019
Size: €750 million ($830 million)
Maturity: 2024
Coupon: 0.75%
Use of proceeds: Promoting environmental and social benefits, as approved by the Ellen MacArthur Foundation.
External review: ISS ESG
Lead managers: Banca IMI; Credit Agricole CIB; ING; Société Générale
Credit rating: Fitch (A+);
Other highlights/notable features: Claims to be the first-ever sustainability bond focused on the circular economy

"We are proud of this achievement" said Alessandro Lolli, head of treasury and finance of the Intesa Sanpaolo Group. "The circular economy is one of the key strategic pillars in our ambition to become an impact bank as a new approach to value creation; this is set out in Intesa Sanpaolo's 2018- 2021 business plan.

"This unique initiative testifies to the group's commitment to both the circular economy as the new frontier of sustainability and protection of the environment, and to social and cultural responsibility."

"Circular economy is a critical focus for the market, yet we have not seen many investment opportunities to address it," commented one awards judge.