What other criteria are taken into consideration?
Despite the clear focus on energy efficiency, we would like to offer our bond investors additional transparency regarding our portfolio. Regional diversification is nothing unusual in this context. We take things a step further by also showing the distance to public transport or land use prior to the construction of each property. Our framework also governs clear exclusion criteria with regard to controversial business areas, such as the defence industry.
Did you see increased investor interest after you announced the issue?
Definitely. Because we wanted to present Deutsche Hypo as a sustainable bank, we organised an extensive road show in Germany, the Netherlands, Luxembourg, France, Denmark, Sweden, Norway, Finland and Austria ahead of the issue. We hit the road in two two-person teams and held more than 50 investor meetings in this time. Each of the two teams featured experts on capital markets as well as on real estate financing – something that was met with particularly positive feedback by investors. We were therefore able to provide information about every property in our portfolio and every location. As it turns out, investors who focus on sustainability ask very detailed questions about the portfolio, resulting in very lively discussions. Investors were very receptive to the fact that being “green” plays an instrumental role throughout our entire value chain.
What was the day of issue like?
There was also a hint of tension in the air on the day of the issue, of course. But that sort of thing is normal with a premiere of this nature. We received more than 50 orders within the offer period, meaning the issue was more than two times oversubscribed. Many of the investors have a very strong focus on sustainability, allowing Deutsche Hypo to further expand its investor base. That in itself made the project worthwhile.
It has been a few months since the issue. What are the next steps right now?
Our new Green Bond Reports were published as of December 31, 2017. The report is a service for our investors to help them get a wide range of interesting facts about the portfolio. For example, they can read about how much CO2 emissions were saved thanks to their investment in the Green Pfandbrief. In terms of issuing activities, we are currently planning to issue one benchmark green bond a year. We have also already been able to sell smaller private placements. Maybe one day we will even be able to issue a high-volume green bond as an unsecured bond, allowing us to cover the entire product range here too.