Talanx launches first-ever green bond amid ‘favourable’ capital market

German re/insurer  Talanx Group, the parent company of Hannover Re and HDI, has issued a €500 million green bond for the first time in its history, taking advantage of the current “favourable conditions” in the capital market. The move is a part of its sustainability strategy.

The bond is placed as a subordinated bond primarily to institutional investors from Germany and abroad. Talanx said the placement was met with a strong demand and “significantly oversubscribed” (approximately 3.5 fold) after a short subscription phase.

The green bond is rated with “A-” by rating agency S&P Global Ratings and it is listed on the Luxembourg stock exchange. It has a fixed coupon of 1.75 percent and the first date for repayment is June 1, 2032.

The company has recently launched a Green Bond Framework, which will create the framework conditions for the financing and refinancing of sustainable projects – mainly in the area of renewable energy generation, and in residential and commercial properties with low energy consumption and reduced CO2 emissions.

The issuance helps the group optimise solvency and liquidity, and achieve its objective of 30 percent reduction in the CO2 emissions of the liquid portfolio by 2025.

“Climate change is a serious threat that exerts an impact on our business as an international insurance group in many different ways. It impacts on primary insurance and reinsurance, as well as on our investment. The fact that we have now reached a further milestone on our sustainability roadmap with the Green Bond represents an important step for our group,” said Jan Wicke (pictured), chief financial officer of Talanx AG.

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