D.he first green federal bond has met with an enormous response from investors. The final result was not yet certain, but it became clear that the ten-year title with an interest coupon of 0 percent should have earned 6.5 billion euros instead of the originally targeted four billion euros. Investor demand amounted to more than 33 billion euros.
The yield was 0.01 percentage point below the reference, the conventional ten-year Bund, which also matures on August 15, 2030. Their return on Wednesday afternoon was minus 0.443 percent. The issue shows that investors are very interested in these stocks, said Floortje Merten, an analyst at ABN Amro. This will help Germany to build the green yield curve soon. The green federal bond is used to finance environmental and climate protection projects.
In contrast to green corporate bonds, the federal government uses it to finance expenditures that have already been made in the past. The Federal Ministry of Finance has determined a total of 12.7 billion euros. State Secretary Jörg Kukies is aiming to raise funds amounting to eleven billion euros this year through green bonds. Another, this time five-year eco-bond is to follow in the fourth quarter.
The high demand for the green debut comes as no surprise. The green government bonds of France and the Netherlands were already very popular. But the federal government differs in that it issues the green federal securities as twin bonds. For every green title there is a conventional twin with the same term. An exact green yield curve can be developed from the yield difference, which is praised in the market.
The finance agency, which manages the debt of the German state, was responsible for the placement. With the concept of the twin bond, she wanted to ensure that green stocks, like conventional papers, can be traded in large quantities at any time. If investors want to sell green Bunds on a larger scale, they should be able to exchange them for conventional twin bonds at any time.
Bunds are among the most important securities in the euro area. Their returns are used as reference interest rates for the euro. The finance agency also wanted to secure the so-called benchmark status for the green stocks.