CHIEF RISK AND INVESTMENT OFFICER
AXA was among the first companies in the finance industry to adopt an ambitious climate strategy and we are committed to accelerate our actions towards a low-carbon economy. With the recent publication of AXA’s Sustainability Bond Framework and with the issuance of our first green bond, we continue with our peers to set new standards for climate finance and to contribute to the ongoing growth of this asset class.
In 2019, AXA launched a new phase of its climate strategy and doubled its green investment target to Euro 24 billion by 2023. With this issuance, the Group further increases this target by Euro 1 billion to Euro 25 billion.
An amount equivalent to the proceeds of the green bond issuance will be exclusively used to finance or re-finance eligible Green Projects in the following eligible Green Categories: Green Buildings, Renewable Energy, Clean Transportation, Energy Efficiency and Natural Resources / Sustainable Forestry, as set out and defined in AXA Group’s Sustainability Bond Framework.
Sustainalytics has provided a second party opinion on AXA Group’s Sustainability Bond Framework, available on www.axa.com. In line with the green bond market standards (ICMA’s Green Bond Principles), AXA will publish an allocation and impact report annually to track the financing of Green Projects and their associated positive environmental impacts.
Financial conditions
This issuance is consistent with the Group’s expectations for debt gearing over its 2020 – 2023 strategic plan, as communicated at AXA’s 2020 Investor Day.
This first green subordinated bond issuance to institutional investors is due 2041. The initial fixed coupon has been set at 1.375% per annum until the end of the 6-month call window period (October 2031), when it will become a floating coupon based on 3-month EURIBOR plus a margin including a 100 basis points step up.
Investor demand was strong with more than 100 institutional investors participating, mainly asset managers, insurers and pension funds essentially across Europe.
The bonds will be treated as capital from a regulatory and rating agencies’ perspective within applicable limits. The transaction has been structured for the bonds to be eligible as Tier 2 capital under Solvency II.
The bonds are expected to be rated BBB+/Stable by Standard & Poor’s, A3(hyb)/Stable by Moody’s and BBB/Stable by Fitch. Settlement of the bonds is expected to take place on April 7, 2021.
