Binder Groesswang and White & Case advised Verbund AG on their issuance of innovative green and sustainability-linked notes with a volume of EUR 500 million. Schoenherr and Linklaters advised BofA Securities and J.P. Morgan in their capacities as joint ESG structuring agents and joint bookrunners, as well as Erste Group, Morgan Stanley, and Societe Generale in their capacities as Joint Bookrunners.
Verbund is an Austrian electricity company that is one of the largest producers of electricity from hydropower in Europe. Close to 100% of Verbund's electricity generation comes from renewable hydropower.
According to Binder Groesswang, "the notes combine the feature of environmentally sustainable use of proceeds with a coupon step-up linked to company-wide sustainability goals. According to the firm, "the notes have a twenty-year-term and a coupon of 0.900% and are linked to clearly defined sustainable targets: (i) the newly-installed production capacity of renewable energy of hydropower, wind power and photovoltaic (PV) of Verbund AG (including its subsidiaries) reached at least 2,000 MW and (ii) the additionally installed transformer capacity of Verbund AG (including its subsidiaries) reached at least 12,000 MVA. Both sustainable targets shall be reached by 31 December 2032. If Verbund AG fails to achieve the sustainable targets by this date, the original rate of interest will be increased by 25 basis points up to the maturity date."
In addition, Binder Groesswang reported, "Verbund AG will allocate an amount equal to the net proceeds to certain green projects. On a best effort basis, Verbund AG aims to complete such allocation within three years of the issuance of the notes. These green projects, the modernization of certain grid systems in Austria, and the refurbishment and extension of the existing Toging-Jettenbach hydropower plant in Germany comply with Verbund AG’s Green Financing Framework."
According to Schoenherr, "the notes were successfully placed among institutional investors and were oversubscribed several times. Investors with a focus on sustainability were given preferential treatment in the allocation process and represented more than 90% of the final order book. The notes have a denomination of EUR 100,000 each and provide for a coupon step-up in case two targets set by Verbund are not achieved by the end of 2032. They are listed on the regulated market of the Luxembourg Stock Exchange as well as on the Official Market of the Vienna Stock Exchange. The rating for the notes is 'A' by S&P and 'A3' by Moody's.
Binder Groesswang's team consisted of Partners Emanuel Welten, Tibor Fabian, and Florian Khol, and Attorney Philipp Tagwerker.
Schoenherr's team consisted of Lead Partner Christoph Moser, Partner Ursula Rath, and Associates Angelika Fischer and Viktoria Stark.
Linklaters' Frankfurt-based partners Alexander Schlee and Peter Waltz led that firm's team acting as international counsel to the joint ESG structuring agents and joint bookrunners.
White & Case's team was led by Frankfurt-based Partner Karsten Wockener.
