A.P. Moller – Maersk has issued its first green bond to help fund its green methanol newbuilds.
The 10-year, EUR 500 million (USD $678 million) green bond comes under the umbrella of Maersk’s Green Finance Framework. The bond will help fund Maersk’s first feeder vessel and the ground-breaking series of 8 large ocean-going containerships, which will be capable of operating on carbon neutral methanol by 2023 and 2024, respectively.
The transaction, which was placed on Thursday, was well received by investors and was several times oversubscribed with a final order book of EUR 3.7 billion (USD $4.2 bn). The transaction priced at coupon of 0.75%, the lowest coupon ever for Maersk.
Green bond ratings provider Cicero Green was appointed to review the framework and ultimately verify its alignment with the ICMA Green Bond Principles 2021 and the Green Loan Principles 2021, as well as market practices. The framework has received a Cicero Medium Green shading and a governance score of Excellent.
“Issuing Green Financing Instruments is a further step to integrating sustainability into our financing operations as it is an effective tool for channelling investments to projects with positive environmental impact and thereby contributing to the achievement of the UN Sustainable Development Goals (SDGs) and the Paris Agreement,” said Patrick Jany CFO at A.P. Moller – Maersk. “With this green bond, we aim at diversifying our investor base by reaching out to new investors and increasing the transparency of our ESG ambitions and performance even further towards our stakeholders.”
Maersk said it intends to align its funding strategy with its goal to become carbon neutral by 2050, which led to the establishment the new Green Finance Framework.
Amid one of the best markets on record for container shipping, shipowners have been busy placing orders for newbuilds, making 2021 now the most active year ever for new containership orders. But as others expand their order books, Maersk has mainly remained on the sidelines as it focusses on decarbonizing its operations instead of investing in additional fossil-fuel powered ships. Maersk placed its only shipbuilding order of the year in August for eight methanol-fueled ships representing an investment of $1.4 billion.
“We don’t believe in more fossil fuels,” said Morten Bo Christiansen, vice president and head of decarbonization, during an interview earlier this year.
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