The European Bank for Reconstruction and Development (EBRD) has priced its largest green bond transaction to date, raising €1 billion (US$1.09 billion).

The seven-year note issuance marks AAA-rated EBRD’s return to the euro market after an absence of three years. It follows the bank’s US$1 billion 10-year transaction and US$2.5 billion five-year deal earlier this year.

BNP Paribas, Crédit Agricole CIB and NatWest Markets acted as the joint lead managers.

The offering, which pays an annual coupon of 2.875% and matures on July 17 2031, was priced at 99.856%, with a re-offer yield of 2.898%. The spreads were set at 12bp over mid-swaps and 47.5bp over the benchmark.

The green bond was issued off EBRD’s Environmental Sustainability Programme, where proceeds are earmarked to support a specific portfolio of green projects, which currently comprises investments in five areas: energy efficiency, renewable energy, water management, waste management, pollution prevention, and control/sustainable transport.

According to EBRD, it was encouraged by a positive market backdrop recovering from a recent volatility on the back of the snap French elections, and so it was able to announce the mandate on July 9. 

Interest from investors grew rapidly throughout the morning, surpassing €2.6 billion by 10:13 UKT, enabling the spread to be set at MS+12bp. The order book closed at 10:30 UKT with final orders in excess of €2.7 billion and the size was set at €1 billion with demand from over 70 investors.