Client Stories

PELF receives warm welcome for debut Sterling Green Bonds

Prologis buildings, a story of sustainability

Formed in August 2007 with the purpose of owning and operating core industrial distribution properties across Europe, Prologis International Funding II SA (PELF) is Europe’s largest open-ended logistics fund with a high-quality portfolio.

PELF - managed by Prologis, a global leader in logistics real estate - has a long-standing commitment to sustainability, focusing on minimizing negative environmental impacts and growing its portfolio of certified sustainable buildings; at the end of 2021, PELF had 146 sustainably certified buildings.

In 2020, Prologis published its Green Bond Framework, which also covers its different funds, along with PELF. The Framework outlines the range of real estate-focused sustainability categories - green buildings, energy efficiency and renewable energy - that it funds with the proceeds of its green bonds.

PELF was the first logistics real estate company to issue a EUR Green Bond in 2018 and has issued another five EUR Green Bonds, totalling €2 billion since. 90% of PELF’s outstanding bonds are now Green Bonds (by volume). 

Intensive investor dialogue prior to green launch pays off

Having supported PELF in five green issuances already, the fund company turned again to NatWest as a trusted advisor to support with its green Sterling debut.

To allow PELF to present its credit and sustainability story in detail to UK investors, the NatWest team recommended a 2-day roadshow with investor meetings, one-to-one investor sessions and a Group Investor Call – all together reaching 57 accounts.

The momentum generated during the roadshow translated into an order book of £2 billion, evenly split between the £300m, 10-year and the £250m, 20-year issuance, allowing PELF to tighten the pricing.

The transaction received considerable support from ESG investors: Approximately 74% of investors in the orderbook for the 10-year bond were classified as ESG investors, while 79% in the 20-year bond orderbook were investors with a strong or modest ESG commitment. Asset and Fund Managers from the UK took the majority of the allocation for each bond, with insurance and pension funds receiving a third of the longer dated issuance. 

Successful transaction positions PELF well for future visits to Sterling market

Thomas Hansson, Debt & Financing Solutions, NatWest, said: “We are thrilled for our customer, PELF, to have achieved such a strong outcome in terms of target size and pricing, despite having to navigate a more volatile market backdrop. This successful transaction positions PELF well for future visits to this market.”

Dr. Arthur Krebbers, Head of Corporate Climate and ESG Capital Markets at NatWest, stated: “We’re excited to have been able to help PELF with its debut Sterling Green Bond, after supporting PELF with five other green issuances over the years. Climate is of paramount importance to our business, our customers and the economies we operate in, and we continue to support companies preparing their transition to sustainable operations such as PELF.”

Christian Nickels Teske, Head of Treasury Europe and Capital Markets at Prologis, commented: “We are very pleased with the investor support that we have received for our two debut Sterling Green Bonds. We appreciate the interaction with the NatWest team on the recent transactions but also that they ensure that we stay abreast of key ESG developments and regulations.”

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