Client stories

Investor demand peaks for Alliander’s 5th Green Bond 

Keeping energy reliable, affordable and accessible for everyone

Alliander is the largest regional energy network company in the Netherlands with 3.3 million electricity and 2.5 million gas connections, distributing energy to more than three million customers.  In addition, a growing number of consumers and businesses, over 12% of the Dutch company’s customer base, are feeding self-generated renewable energy into Alliander’s energy networks.

Alliander, which aims to become climate-neutral by 2023, is committed to providing an energy system where everyone has equal access to reliable, affordable, and renewable energy. To deliver its mission, the company follows a four-pillar strategy:  1) Supporting customers in making choices that are not just good for them, but also for the energy system as a whole, 2) building new open networks, 3) digitising networks while continuing to work on 4) an excellent network operation.

In 2022, Alliander published its Green Finance Framework which, as per ISS ESG’s Second Party Opinion is aligned with the ICMA 2021 Green bond Principles and the LMA 2021 Green Loan principles and the selection criteria for the eligible green asset categories is aligned with the Technical Screening Criteria for Climate Change Mitigation requirements of the EU Taxonomy (Climate Delegated Act of June 2021) on a best-efforts basis. Eligible project categories include Renewable Energy, Energy Efficiency, and Green Buildings. 

Highest oversubscription for Alliander Green Bond 

Looking to issue its 5th Green Bond, Alliander approached NatWest, who had previously supported the Dutch company as Arranger for its Euro Medium-Term Note (EMTN) programme and Advisor for its Green Finance Framework update, to support the transaction in the role of Active Bookrunner. This green bond continues to align Alliander’s funding strategy with its wider corporate mission, including its sustainability objectives and long-term goals

Opening books for a Green €500 million (will-not-grow) 5-year deal, orders grew steadily to reach €2.25 billion at time of guidance, which allowed Alliander to tighten spreads. With the order volume further rising, the issuer opted for another price revision, which resulted in a final orderbook of €3.4 billion – the highest orderbook oversubscription (6.8x) that Alliander has ever achieved. The coupon was set at 2.625%.

Asset managers led demand, taking 57% of the allocation, while insurance and pension funds took 20% and official institutions 18%. More than one-third of the order book was allocated to investors with a ‘strong ESG commitment’ (as per the NWM ESG investor scoring tool). The order book was well diversified across regions, led by DACH investors taking 26%, investors in France 29% and in the Netherlands 21%.

Alliander now has €1.7 billion Green bonds outstanding, which represent 50% of Alliander’s overall debt.  

Transaction highlights Alliander’s solid investor base 

Enno Dykmann, Treasury Manager, Alliander, commented: “We are extremely pleased with the positive feedback we have received for our 5th Green Bond. The multiple times oversubscribed transaction shows us, once again, how solid our investor base truly is and their approval for the inclusion of EU Taxonomy elements in the updated Green Financing Framework.”

Daniel Bressler, ESG and Climate Capital Markets, NatWest, said: “It was a great pleasure to have had the opportunity to guide Alliander through the update of their framework and we congratulate, Alliander, on their fantastic return to the Green bond market. The quality of the investor base came through from the outset, and the extremely positive reception exemplifies the quality and demand for the Alliander name and the support for their Green Framework. This successful transaction also demonstrates NatWest’s commitment to support our customers on their sustainability journey by offering markets insights, innovative sustainable finance solutions and access to a broad ESG investor base.”

Disclaimer

This article has been prepared for information purposes only, does not constitute an analysis of all potentially material issues and is subject to change at any time without prior notice. NatWest Markets does not undertake to update you of such changes.  It is indicative only and is not binding. Other than as indicated, this article has been prepared on the basis of publicly available information believed to be reliable but no representation, warranty, undertaking or assurance of any kind, express or implied, is made as to the adequacy, accuracy, completeness or reasonableness of the information contained in this article, nor does NatWest Markets accept any obligation to any recipient to update or correct any information contained herein. Views expressed herein are not intended to be and should not be viewed as advice or as a personal recommendation. The views expressed herein may not be objective or independent of the interests of the authors or other NatWest Markets trading desks, who may be active participants in the markets, investments or strategies referred to in this article. NatWest Markets will not act and has not acted as your legal, tax, regulatory, accounting or investment adviser; nor does NatWest Markets owe any fiduciary duties to you in connection with this, and/or any related transaction and no reliance may be placed on NatWest Markets for investment advice or recommendations of any sort. You should make your own independent evaluation of the relevance and adequacy of the information contained in this article and any issues that are of concern to you.

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