Luxembourg raises 1.5 bln euros in Europe's first 'sustainability' government bond
(Reuters, 7 Sep 2020) The bonds blend 'green' bonds that help the environment and 'social' bonds that target spending with socially beneficial outcomes
Luxembourg became the first European government to sell a "sustainability" bond on Monday, raising 1.5 billion euros ($1.77 billion).
Its choice of a 'sustainability' bond, a blend of 'green' bonds that finance environmentally friendly projects and 'social' bonds that target spending with socially beneficial outcomes, contrasts with that of other European governments.
Like Germany last week, they have sold 'green' bonds in their efforts to fund climate friendly spending and support the development of sustainable finance.
Luxembourg will divide the proceeds equally between green and social projects, a finance ministry spokesperson told Reuters.
With the outbreak of the pandemic, global 'green' bond issuance took a backseat as 'social' bond issuance, especially from development banks, rose sharply.
"We are seeing more interest to go down the social and sustainable route from sovereigns," said Trisha Taneja, head of ESG advisory at Deutsche Bank, which managed the sale together with BCEE, BNP Paribas, BIL and Societe Generale.