Belgium: Aedifica prices its first benchmark Sustainability Bond

Aedifica, the Belgian real estate company with a focus on senior care, priced its first benchmark Sustainability Bond at the end of last week, tapping into the growing pool of funds looking for assets in the ESG space. The €500m (US$m) 10-year notes pay a fixed coupon of just 0.75% and were reportedly priced to yield mid-swaps plus 78bp.

Earlier in the week, the borrower received a BBB rating from S&P, with the rating outlook stable.

The deal was met with strong demand from “renowned and high-quality investors which placed sizeable orders”, according to Aedifica. The bond drummed up an order book of €1.8bn, representing more than a 3.6-times cover, before pricing.

“This first issuance [of sustainability bonds] brings further diversification to Aedifica’s funding sources, optimizing the capital structure,” said Delphine Noirhomme, investor relations manager at Aedifica. “By entering the bond market, Aedifica has broadened its investor base. This will allow us to extend debt maturity and bring down the cost of debt.”

Notes were issued under Aedifica’s updated Sustainable Finance Framework and are aligned with its long-term sustainability goals, so proceeds will be used to finance environmentally sustainable healthcare assets as defined in the Framework. VE provided a Second Party Opinion on the alignment of the Sustainable Finance Framework with relevant international standards, including the ICMA Green- and Social Bond Principles.

Stefaan Gielens, CEO of Aedifica, said: “This Sustainability Bond is a further building block in our long-term sustainability strategy. It will allow us to accelerate our sustainability efforts and reduce the portfolio’s environmental footprint.”

ABN AMRO and Morgan Stanley acted as global coordinators. Belfius Bank, BNP Paribas and ING joined the global coordinators as bookrunners.