In two years, Société du Grand Paris secures half of the Grand Paris Express financing
On Wednesday 07th October 2020, Société du Grand Paris successfully launched its fifth and sixth Green bond issuances under its Green EMTN programme, for a total amount of EUR 6bn split over two distinct tenors: EUR 3bn at 10-year (0% coupon) and EUR 3bn at 40-year (0.7% coupon). This represents the largest Green transaction ever issued by a non-sovereign issuer.
This new Société du Grand Paris transaction attracted over 230 investors on the 40-year tranche, and 185 investors on the 10-year tranche, for a total demand of EUR 18bn. Despite a global environment impacted by the Covid-19 crisis, international investors have reiterated their keen interest for the financing of the Grand Paris Express, confirming the credibility of Société du Grand Paris who now ranks 4 th largest Green Bond issuers worldwide.
Société du Grand Paris would like to thank its relationship banks gathered in that transaction and its investors for their strong contribution and continuous engagement since the establishment of the first ever Green EMTN programme in 2018: Société du Grand Paris has now raised EUR 16bn which represent almost 50% of the Grand Paris Express financing.
“Only two years after launching the first 100% Green Bond programme on the international markets, Société du Grand Paris has now secured half of the Grand Paris Express financing. This renewed confidence from the capital markets strengthens Société du Grand Paris in its investment dynamic for the benefit of the companies, SMEs or majors, involved in the project of the Grand Paris Express. The annual rate of investment will thus remain at an average of EUR 4.5 billion per year until 2023. The trajectory remains clear, stable and readable and fully contributes to the French economy’s green recovery.” said Thierry Dallard, Chairman of the management board of Société du Grand Paris.
The transactions were met with exceptional investor interest from both conventional and ESG investors. At its closing, orderbooks exceeded a combined EUR18bn of wich EUR 8.5bn at 10 year and EUR 9.5bn at 40 year. It is the largest oderbook ever achieved by Societe du Grand Paris.
Transaction Highlights
On Friday 02nd October 2020 at 17:26 CET, Societe du Grand Paris annnounced to the market a Global investor Broadcast and a live Q&A to be held on 6th October arranged jointly by Barclays and BNP Paribas as well as a dual tranche EUR 10 and 40 year green benchmark transactions.
Barclays, Credit Agricole CIB, HSBC, J.P. Morgan, Natixis and Nomura have acted as Joint Lead Managers on the 10-year tranche while BNP Paribas, Deutsche Bank, Goldman Sachs Bank Europe SE, Natwest Markets and Société Générale acted as Joint-Lead Managers on the 40-year tranche. Credit Agricole CIB acted as Communication Coordinator.
On Wednesday 07th October 2020 at 08:53 CET, Societe du Grand Paris opened books on the dual tranche project with a guidance of 25bps area over OAT November 2030 for the 10 year tranche and 28bps area over interpolated OATs for the 40 year tranche.
EUR 3bn 25th November 2030 tranche:
Investors immediately showed a significant interest in this new tranche and the orderbook quickly grew, notably thanks to large tickets placed by a number of high quality investors. At 10:46 CET, less than two hours after guidance was released to the market, Société du Grand Paris was able to communicate on an orderbook reaching over EUR 6.75bn (excluding JLM interest) and to set the spread at 22bps over OAT November 2030.
Despite the spread tightening, the orderbook continued to grow and closed over EUR 8.5bn at 11:30 CET, a further testimony of investors’ confidence in Société du Grand Paris. The transaction was launched at 12:00 CET, with a size set at EUR 3bn.
The 10 year tranche was priced at 15:26 CET with a coupon of 0.0% representing a yield of -0,013% and a spread of + 22bps over OAT November 2030.
Traditionally active on this part of the curve, Bank Treasuries received the lion share of allocations (48%), followed by Asset Managers (28%) and Central Banks / Official Institutions (14%). French and UK investors were the most represented, with respectively 25% and 24% of allocations.
EUR 3bn 15th October 2060 tranche:
At 10:46 CET, the oderbook grew quickly and stood in excess of EUR 7.5bn (excluding JLM interest), allowing the issuer to set the spread at 25 bps over interpolated OAT May 2052 and OAT May 2066.
The investor demand continued to pile in and the oderbooks closed at 11:30 CET in excess of EUR 9.5bn (excluding JLM interests). The transaction was launched at 12:00 CET and allowed the issuer to set the size at EUR 3bn.
The 40 year tranche was priced at 15:28 CET with a coupon of 0.7% representing a yield of 0.750% and a spread of + 25bps over the interpolated OATs.
The geographical distribution is nicely split between domestic investors (France 45%) and the international investor community (55%). In terms of investor types, the bulk of the demand came from Insurance companies (44%) and Asset Managers (40)% followed by banks (10%) and Central Banks / Official Institutions (3%).
10 & 40-year green bond terms summary
