03.12.2021 |
Back in 2020, UNIQA successfully offered its first “green bond” on the capital market – the first bond of this type to be issued by an Austrian insurance company – and committed to subsequently investing EUR 200 million in projects to protect the environment and the climate. “The performance of our first green bond strikingly demonstrates how much demand there is from many investors for sustainable investment models as an addition to their portfolio. We see a clear and very encouraging trend here in terms of climate protection: sustainability has become a key factor in investment decisions,” says Kurt Svoboda, Chief Financial and Risk Officer at UNIQA Insurance Group AG. “With sustainable investments totalling more than EUR 1 billion established to date, taking account of EU regulations, and with the goal of climate neutrality by 2040, we are clearly among the pioneers in the Austrian insurance sector. The considerable interest from investors in our second green bond once again impressively shows the high level of trust that national and international investors have in UNIQA and their willingness to join us on our consistent path towards more sustainability in investment,” continues Svoboda. In addition to a number of other memberships and cooperations, UNIQA is the only insurance provider in Austria to date to have entered into a strategic partnership with the leading Net Zero Asset Owner Alliance, and has thus undertaken to provide detailed reporting on its progress in the field of sustainable investment.
The subordinated bond is to be repaid after 20 years in accordance with regulatory provisions. UNIQA can call the bond for the first time after 10 years. The bond has a rating of BBBand a coupon of 2.375 percent p.a. With the green bond format, UNIQA undertakes to make investments in the same amount as the issue in projects for generating renewable energy (wind and solar farms), for sustainable waste management (separation and recycling of waste, including energy generation) and for mobility (rail transport, expansion of local public transport). Figures on the tons of CO2 emissions saved annually as a result will be published in reports.
Simultaneous redemption of outstanding subordinated bonds
At the same time as issuing the second green bond, UNIQA redeemed EUR 375million of outstanding subordinated bonds. These bonds could be called by the company for the first time as at 31 July 2023 and as at 27 July 2026 and had coupons of 6.875% and 6.00%. UNIQA has thus extended the potential term of the outstanding financing and will reduce the interest burden in the coming years. The bonds were redeemed by UNIQA at close to the current market prices and with a premium on the nominal amount. In 2021, the company’s additional financing costs come to a one-off amount of approximately EUR 65 million. These costs should be partly or fully compensated for in the future by annual interest savings of around EUR 9 million. Nevertheless, UNIQA is keeping the current outlook for the 2021 financial year unchanged.