Austria launches its first green bond – lead manager

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Austria launched its first green bond on Tuesday, according to a chief manager.

The 4 billion-euro ($ 4.3 billion) bond saw a final investor demand of 25 billion euros, according to a memo from Lead Manager seen by Reuters, which says Austria will hold 250 million euros to issue.

As the bond matures on May 23, 2049, it will offer investors a spread of 22 basis points at mid-swap levels, less than 25 basis points at the start of the sale, a previous memo showed.

European governments have shown strong interest in the green bond issue, which finances eco-friendly projects, as investor demand for such assets has increased in recent years. Germany, Britain, Italy, Spain, the European Union and Denmark have issued the first green bonds in the last two years.

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In addition to long-term green bonds, which will finance most of the country’s green fund demand, Austria is also the first government to include short-term debt instruments such as treasury bills and commercial paper in its green loan program, its debt management office said in a presentation.

It will attract short-term investors, such as central banks, money market funds and bank treasuries, and help expand the green wealth universe, it said.

Austria has spent just over 5 billion euros to fund each of its green bond programs for 2021 and 2022, the presentation showed, with nearly three-quarters of this being in the field of clean transport.

Greece is expected to launch its first issue in the second half, although green bond issuance has slowed this year.

Austria on Monday hired Barclays, Bofa, Deutsche Bank, Goldman Sachs, JPMorgan and Unicred to handle sales.

(1 = 0.9338 euros) (Reporting by Jason Neely and Mark Potter edited by Yoruk Bahseli)

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