Record orders for the inaugural maxi green bond launched by the European Union on 12 October. The issue, equal to 12 billion euros and with a duration of 15 years, received applications for over 120 billion. The success of the bond will allow the EU to save on interest, placing the bond with a lower yield than initially expected. The transaction is handled by Bank of America, Crédit Agricole, Deutsche Bank, Nomura and Td Securities as joint lead managers.
How the EU “green bonds” work
The so-called green bonds, the green bonds issued by the EU, will be used to finance part of the Next Generation EU: the 750 billion euro package launched by Brussels to help the EU economy recover from the pandemic crisis. The goal of the EU summits is to raise € 250 billion by 2026, about one third of the entire plan for the “next generation” of Europe.
The bonds issued must meet the criteria set by the Commission to verify that the impact of the loans is really for the benefit of the green turning point made by Palazzo Berlaymont and implemented by the maxi-European plan. The member states that will collect the quotas of resources allocated to their own Recovery Plans, the national recovery plans, will then have to report to the European Commission on the green expenses made. The reporting will revolve around nine categories, including clean energy, energy efficiency and clean transport.