NatWest helps reopen Sterling and Euro market with sustainability transactions post crisis

Highlights of the lead-managed transactions of the last two weeks included:

  • Volkswagen AG’s €1.75 billion green dual tranche attracts 278 investors: Volkswagen AG’s Green Bond, where we supported the car manufacturer to move ahead on an opportunistic basis, was the first proof point of investors’ willingness to participate in primary. Leveraging their standing with the investor community, the offering generated demand above €6 billion across the 3-year and 6-year green ‘Use of Proceeds’ tranches. The stability of orderbooks allowed VW to optimise both size and price, resulting in a favourable outcome, with the proceeds going towards Volkswagen’s decarbonisation strategy.
  • Wessex Water reopened Sterling market with Sustainability Bond: Wessex Water, which provides essential services to 2.9 million customers across the south-west of England, tapped into the market with a long 9-year Sustainability Bond, the first under the issuer’s new Sustainable Financing Framework.  The Sterling transaction, where we were able to help the client position their credentials with the investor community, reopened our domestic market and attracted the full breadth of the UK’s real money community, serving as a useful barometer of appetite.
  • Severn Trent issued the year’s most successful corporate Sterling bond so far: Severn Trent, one of the UK’s largest water companies serving more than 4.6 million households and business across the Midlands and Wales, issued the year’s most successful corporate Sterling bond so far, a 13-year £400 million Sustainability deal. The transaction was more than 8 times oversubscribed, capturing incremental demand from a further-diversified investor base, given the additional duration on offer.
  • Continental investors showed strong appetite for National Gas’ inaugural Euro tranche:  National Gas, which maintains and manages around 7 million domestic, industrial and commercial combined gas assets across the UK, launched their first issuance under their new ownership structure, a dual-tranche 7-year Euro and 12-year Sterling transaction. The Euro tranche represented National Gas’ debut outing in this currency, which received strong support from insurance funds as well as continental investors, leveraging our broad distribution platform. We assisted our customer with comprehensive investor engagement prior to launching.
  • United Utilities achieved attractive pricing for long 15-year Sustainability Bond: United Utilities’ transaction, where we ensured that our customer was well-prepared to meet investors’ expectations of ESG-format transactions, was met with broad support for the additional duration on offer, allowing United Utilities to print with only 5 basis points of concession.

We are delighted for our customers, who have proven with their issuances that investors continue to show support for companies with strong credentials despite recent market volatilities. These transactions are also a testament to NatWest’s support for essential services in the UK and Europe, and of our commitment to help corporates on every step of their sustainability journey.

Jamie Stuart
Head of Debt Capital Markets Origination at NatWest

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Looking ahead, we are optimistic on current markets, which we believe offer opportunities for issuers to advance their funding plans.

If you want to hear more about our recent experience and our views from here, or if you would like to discuss how we could help you, please get in touch through your usual bank contacts. 

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