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CTP Green Bonds largest inaugural issue in CEE real estate

CTP B.V. successfully issued a debut Green bond for EUR 650 million in October 2020, with the companyʼs inaugural Green bond issuance becoming the largest debut issuance by a CEE real estate company, according to a press release sent to the Budapest Business Journal.

The bonds received a strong reception from investors and were several times oversubscribed with a peak order book in excess of EUR 2 billion.

Richard Wilkinson, CFO at CTP, said, "CTP was in the right place at the right time to be able to successfully execute its debut bond. Logistics properties have strong fundamentals at the moment, particularly in CEE which has some of the strongest economic fundamentals in Europe. We also have a long-term commitment to sustainability as evidenced by the BREEAM certification of our entire portfolio. CTP’s robust credit fundamentals were very well appreciated by rating agencies and investors, allowing to successfully secure two investment-grade ratings from Moody’s and S&P and complete our debut green bond despite turbulent market conditions."

CTP chose to issue Green Bonds following its 2019 commitment to BREEAM certify its entire portfolio of logistics and industrial projects to BREEAM Very Good and above.

According to the press release, the proceeds from the issue will be used to finance or refinance a portfolio of Eligible Green Assets as outlined in the CTPʼs Green Bond Framework as well as financing eligible projects going forward.

Morgan Stanley, acting as the sole rating and green structuring advisor stated: "Strong momentum saw books covered within an hour of launch, with the book attracting orders from over 150 high-quality accounts. This is a highly successful debut issue for CTP."

The issue achieved broad institutional distribution, selling primarily into asset managers (60%) with most of the demand coming from the UK (32%), DACH region (22%), Benelux (20%), with CEE investors accounting for 10% of the deal.

Jan Evert Post, head of investor relations at CTP said, "We are very pleased by the depth and breadth of support for this inaugural CTP issuance. The issuance of the notes will allow CTP to finance itself both at a lower cost and more efficiently."

Despite a volatile market backdrop and the ongoing coronavirus crisis, CTP’s green bond issue garnered strong demand, allowing CTP to achieve attractive pricing and upsize the issue by EUR 150 mln from original guidance.

The issuance represents the largest and, with an order book of over EUR 2 bln, one of the most oversubscribed EUR debut bonds by a CEE real estate company.

The bond matures on September 24, 2025, and carries a fixed annual coupon at the rate of 2.125%.