DUBAI - The Arab Petroleum Investments Corporation (APICORP) sold $750 million debut green bonds with a five-year maturity on Wednesday after drawing around $2.1 billion in orders for the climate-friendly debt, a bank document showed.
The spread settled at the lower end of final guidance and 10 basis points tighter than initial price guidance, the document from one of the banks on the deal showed.
Environmental, social and governance (ESG) concerns are gaining ground in the oil-rich Gulf region, with borrowers setting up ESG frameworks to transition to greener economies and capitalise on a global surge in the awareness of sustainability risks following the COVID-19 pandemic.
APICORP, a multilateral development bank headquartered in Saudi Arabia, ended 2020 with close to $8 billion in total assets and $115 million in net income, up from $112 million in 2019.
Abu Dhabi government-owned Etihad Airways is working on what would be its third financing transaction linked to sustainable investment and Saudi Arabia and its sovereign wealth fund are both expected to issue ESG-linked debt.
The bonds will be used to finance, refinance or invest in projects linked to its green finance framework, which include projects in green buildings, renewable energy and pollution prevention and control.
The institution, which is wholly owned by the ten member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC), is a regular issuer in the debt capital markets
In February, APICORP sold $750 billion in five-year bonds and in March reopened those bonds for subscription, raising another $250 million.
(Reporting by Yousef Saba; Editing by Alison Williams) ((Yousef.Saba@thomsonreuters.com; +971562166204; https://twitter.com/YousefSaba))