Saudi Arabia raked in EUR 1.5 bn from the country’s first sovereign EUR-denominated green bond, Bloomberg reported on Wednesday, citing an unnamed source. The seven-year green note — which was 4.9x oversubscribed — drew in some EUR 7.3 bn in orders. MENA’s first sovereign green bond issuance was priced at a spread of 115 basis points (bps) above its benchmark, after the pricing was tightened from an original 155 bps spread.

The money raised will go towards green projects that align with the country’s greenfinancing framework(pdf) and come as part of Saudi’s plan to slash emissions by 278 mn tons per year by 2030 and reach net zero by 2060.

REFRESHER- What is the GFF? The framework identifies eight types of green projects to be funded through the sale of the bonds: renewable energy, energy efficiency, carbon capture and storage, green hydrogen, cutting emissions, sustainable water and wastewater management, and climate adaptation measures.

The green tranche was sold alongside a EUR 750 mn conventional sukuk that saw orders topping EUR 2.7 bn, priced at 145 basis points above mid-swaps, according to the source.

ADVISORS- HSBC, JP Morgan, and Société Générale were tapped as global coordinators and joint active bookrunners for the issuance, while Crédit Agricole CIB and SNB Capital will work passively. HSBC and JP Morgan also acted as joint green structuring agents.

Saudi’s latest green bond issuance: The Saudi Public Investment Fund (PIF) reportedly initiated an additional USD 500 mn worth of green bonds from the 10-year tranche of its maiden green bond sale last September. PIF’s blockbuster maiden green bond drew in orders of around USD 17.9 bn in a single day back in October 2022. PIF also sold USD 5.5 bn of green bonds in its second issuance last year.

IN OTHER DEBT NEWS-

Emirati district cooling firm Tabreed has reportedly appointed banks to advise on a five-year Reg S USD-denominated benchmark green senior unsecured sukuk issuance, Zawya Projects reported on Monday. The issuance is part of the company’s USD 1.5 bn Trust Certificate Issuance Programme.

ADVISORS- Citibank, First Abu Dhabi Bank (FAB), and Standard Chartered Bank will act as joint global coordinator, and also serve as joint lead managers and joint bookrunners along with Emirates NBD Capital, FAB, and HSBC. Abu Dhabi Commercial Bank has been appointed as co-manager.

Sounds familiar? Tabreed said last week that it was exploring options for debt refinancing, with the board scheduled to vote on a plan to issue up to USD 2 bn in additional non-convertible debt instruments on 25 March. Last year, we heard that Tabreed has been considering issuing up to USD 1.2 bn of green sukuk and bonds in 2025 to refinance some of its debt.

REMEMBER- Tabreed just had a great year: The company reported a 32% y-o-y climb in net income in FY 2024, reaching AED 570 mn, as well as revenue improvements on the back of rising consumption volumes and higher connection capacity.

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