AP Moller-Maersk said on Friday that it has launched its first green bond with a €500m ($564m) issue to help fund the construction of a series of carbon-neutral ships.
The 10-year issue was heavily oversubscribed, attracting €3.7bn in offers from potential investors. As a result, Maersk will pay an annual coupon of just 0.75% on the bonds, which will trade publicly in Luxembourg.
This was its "lowest annual interest ever", the shipping giant said.
The funds will go towards financing eight large containerships and a feeder vessel that will be able to operate on carbon-neutral methanol by 2024.
As TradeWinds reported, Maersk confirmed in August the placing of a pioneering order for eight firm 16,000-teu newbuildings and four options at Hyundai Heavy Industries.
Maersk has announced a total capital expenditure of around $1.4bn for the eight vessels. The single feedership is expected to add only marginally to that.
The bookrunners for the €500m bond issue were BNP Paribas, Bank of America, ING, Nordea and Standard Chartered.
According to a Maersk spokesperson, the issue was scooped up by a "broad range of quality investors", particularly by those with a focus on environment, social and governance (ESG) criteria.
According to the company’s statement, the bond is the opening move in a wider new Green Finance Framework to fund projects that will have a "positive environmental impact", contributing to the fight against global warming and to Maersk becoming carbon neutral by 2050.
Long-term vision
Maersk plans to launch "a variety of sustainable financing instruments" under this green finance scheme, including bonds, loans and project finance.
"We aim at diversifying our investor base by reaching out to new investors and increasing the transparency of our ESG ambitions and performance even further towards our stakeholders," said chief financial officer Patrick Jany.
Asked to comment on when Maersk is planning to follow up with new issues, the spokesperson said: "We have not given any guidance for further issues but would like to build a curve of bonds in both euros and US dollars".
To guarantee the green credentials of this finance programme, Maersk appointed Cicero, a Norway-based climate research institute that has been active in setting up labelling standards for such instruments.
"Based on the overall assessment of the eligible green assets under this framework and governance and transparency considerations, Maersk’s Green Finance Framework has received a 'Cicero Medium Green' shading and a governance score of 'Excellent'," Maersk said.
According to the ranking scheme posted on its website, "Medium Green" is the second-best of Cicero's three green labels, describing projects "that represent steps towards the long-term vision, but are not quite there yet".
In recent months, several other companies have unveiled bonds carrying a "green", "sustainability-linked" or "[environmentally] transitional" label. They include NYK Line, Seaspan Corp and Fred Olsen group holding company Bonheur.
