New York investors Mariner Investment Group have this week purchased a “first-of-a-kind” Green Capital Note from French Bank Crédit Agricole CIB, taking on the portfolio risk of a range of the bank’s projects in the power, oil and gas, real estate, infrastructure, and transport sectors.
The $3bn note – dubbed Premium Green 2017-2 – will free up around $2bn in regulatory capital to reinvest in several green sectors, including renewable energy, energy efficiency loans for commercial real estate renovation, public transportation and sustainable waste and water treatment facilities, according to Crédit Agricole.
“We very much hope that the news of this transaction will be the first in a wave of issuances of Green Capital Notes,” said Molly Whitehouse, a deal structuring lead at Mariner Investments.
“Capital markets can contribute so much to the mitigation of climate change risk and the necessary renewal of public infrastructure. This transaction demonstrates that synthetic securitization is not just an important tool for balance sheet management, but also can generate real social and environmental returns.”
Crédit Agricole echoed the sentiments, adding in a statement that it plans for the deal to “pave the way” for similar issuances by other financial institutions.
The bank has also promised to regularly report on the composition of the new green loan portfolio, which is based on the Green Bond Framework and has been independently reviewed by Sustainalytics.
“We have placed a strong corporate emphasis on being a market leader in sustainable banking and socially responsible investment,” said Jean-Yves Hocher, CEO of Crédit Agricole CIB. “Premium Green 2017-2 is on the cutting edge, with an optimised portfolio and the commitment to reinvest capital into pro-environmental lending.”