Crédit Agricole Corporate and Investment Bank (CIB) has listed a green note on Taipei Exchange, becoming the first foreign issuer to be accredited by the Taiwanese exchange for the issuance of green bonds.
This debut "green issuance" which has an issuance amount of US$120m, with a five-year tenor and a fixed coupon rate of 2.64%, is a first in Taiwan from a foreign issuers and was joint-lead managed by domestic underwriters including a number of familiar names in the structured products market such as Cathay United Bank, Capital Securities Corp, E.Sun Commercial Bank, KGI Bank, Mega Securities and Taipei Fubon Commercial Bank.
Crédit Agricole CIB was one of the first foreign banks to list its International/Formosa bonds on Taiwan Taipei Exchange dated back in 2014, according to Samy Beji (pictured), global head of structuring and product development at Crédit Agricole CIB. "This landmark transaction is the accomplishment of months of efforts together with our longstanding partners to ultimately deliver the best outcomes for Taiwanese investors," said Beji, adding that thanks to its exotic trading capacities and its structured EMTN programme, the investment bank can already offer to investors a broad range of pay-offs in a green format including equity-linked.
"For the time being, the demand for green bond is mostly focused on simple pay-offs (fixed rate in emerging currencies, callable such as this issuance)," said Beji. "Yet, we have been seeing investors looking at combining a green label with more attractive performance engines. As such Crédit Agricole CIB is working to expand its product offering to equity-linked with green indices, hybrids and FX-linked issued under a green format."
Proceeds raised by this Crédit Agricole CIB Green Note will be deployed to refinance the bank's green portfolio, composed of loans to entities and projects, demonstrating both good environmental and social performance, and belonging to key sectors for the transition to a more environmentally-friendly economy.
Crédit Agricole CIB's green bond framework and its use of funds were reviewed by Sustainalytics. The green bond accreditation approval allows Crédit Agricole CIB to issue multiple green bonds up to USD2bn within two-month period.
According to Beji, compared to the standard issuances, green bonds are still representing a relatively small percentage, although the demand for green bonds is "moving fast".
"Recent events such as China's decision to now lead with Europe the alliance to tackle climate change has a positive impact to the investors' mindset towards green investment, starting with Asia," said Beji. "Innovation generally begins with financial institutions and then spreads over retail markets. If we follow this rule, it would not be very surprising to see the retail structured products markets soon embracing "green" as a new moto. Crédit Agricole CIB is ready to participate to the efforts finding the relevant investment strategies."
Tanguy Claquin, head of sustainable banking at Crédit Agricole CIB, said that Crédit Agricole CIB holds an 'optimistic view' on the development and commitment of Taiwan vis a vis SRI development including its offshore wind power industry and 'will consider further issuance to echo the government's green energy industry promotion policy'.
The French investment bank has issued over 1,320 structured products across jurisdictions of which 273 are live products, according to SRP data
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