M&G has issued a €500m green bond, the first for its €5.4bn M&G European Property Fund.
The green bond attracted strong demand from a broad international investor base, with peak orders exceeding €2.1bn from more than 120 investors, M&G said.
At final pricing, the issuance was 2.8x oversubscribed, enabling the fund to secure five-year financing terms at a margin of 100 basis points.
M&G said this level of demand “demonstrates investor confidence in the fund’s strategy”, as well as the long-term opportunities across European real estate.
Proceeds from the green bond will be used to fund new investment opportunities and eligible green projects, enhancing the sustainability, efficiency and long-term value of the portfolio, the manager said.
Simon Ellis, fund manager, M&G European Property Fund, said: “The green bond marks an important milestone for the fund as we approach its 20th anniversary. It reflects the scale, diversification and quality of the portfolio as well as our long-term strategy to invest in real estate with leading sustainability credentials.
“The additional financial firepower it provides comes at an attractive point in the market cycle and supports our ambition to build on more than €1bn of acquisitions completed over the past 12 months.”
Sally Hurst, director, debt strategy & origination at M&G Real Estate, said: “This successful debut bond issuance establishes an important new source of long-term funding for the fund and broadens its financing options for the future.
“The scale of demand from institutional investors and the competitive terms achieved demonstrate the fund’s ability to access debt capital markets efficiently and create a strong foundation for future issuance.”
To read the latest IPE Real Assets magazine click here.
