Press Release

Issuance of green government bond is a great success

On 8 February, the new green government bond (the so-called Green OLO*) was officially introduced to the press and investors.  The issuance of this bond is part of the investment framework of the Summer Agreement.   This government bond has all characteristics of a regular OLO in order to guarantee the safety and liquidity of the instrument.   The specific feature of this bond is that its proceeds will be used for expenditure and investments with an ecological purpose (more information can be found on https://www.debtagency.be/en/productoloinfo).

The green OLO was issued yesterday, and it was a great success in all respects.   The Belgian Federal Debt Agency could raise not less than 4.5 billion euro by means of this 15-year green OLO.   That is notably more than the target minimum of 3 billion euro, and also the maximum that was presented to the institutional investors during the Agency’s introductory road show. The total market demand of more than 150 institutional investors in this green OLO, amounted to over 12.7 billion euro.  Many of these investors specifically looked for a green bond that was compliant with the Green Bond Principles (GBP).

The Agency obtained a competitive pricing for this green OLO, including an interest rate of 1.289% per year.  According to the Agency, a regular OLO with the same maturity would have accounted for an interest rate which had been 2.5 basis points higher.  Consequently, the green OLO results in an annual savings in interest expenses of 1.125 million euro.

Minister of Finance, Johan Van Overtveldt: “While we had forecast a minimum amount of 3 billion euro, we were confronted with investors showing an overwhelming interest in our green bond.  The maximum amount of 4.5 billion euro was reached.   The Agency obtained a competitive pricing for this green OLO, including an interest rate of 1.289% per year.  A regular OLO with the same maturity would have accounted for an interest rate which had been 2.5 basis points higher. Consequently, the green bond results in an annual savings in interest expenses of 1.125 million euro.  Furthermore, we give a powerful boost to the development of the Green Finance market in Belgium.”

 

*Linear bonds