Munich Re’s third green bond breaks new ground in US market

Global reinsurance giant  Munich Re has launched a third green subordinated bond after  successful issuances in 2020 and 2021, becoming the first European insurer to break new ground in the US market.

The bond will provide $1.25 billion of funds to deploy in sustainable projects in accordance with the company’s Green Bond Framework. It has a coupon of 5.875% and matures in 2042.

The reinsure said that the bond underlines its commitment to the Paris Climate Agreement and supports its strategic goal of “significantly increasing investments” in energy efficiency and renewable energies to combat climate change.

Munich Re claims it is the “first time” a $-denominated green subordinated bond has been issued by a European insurer in the US market under Rule 144A. By issuing this bond in the globally important US$ 144A market segment,  Munich Re has expanded and diversified its group of investors.

Munich Re will use the capital raised to finance or refinance sustainable projects including investments of equity and debt in renewable energy, energy efficiency, clean transportation, green buildings, sustainable water and wastewater management, the eco-efficient and/or circular economy, and the environmentally sustainable management of natural resources and land.

Christoph Jurecka (pictured), chief financial officer of  Munich Re, said: “By successfully placing its first subordinated bond on the US market,  Munich Re has impressively demonstrated its attractiveness for new groups of investors.

“In structuring this bond as a green bond, we are the first European insurer to break such new ground in this market segment. At the same time, the green bond supports the climate targets of our Ambition 2025 strategy.”

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