Deutsche Bank launches €1 billion portfolio with stake in World Bank’s $600 million green bond

By Lisa Kerner

Charlotte, N.C., Feb. 20 – Deutsche Bank announced plans to invest €1 billion into a portfolio of high-quality liquid assets in the form of green bonds, held as part of its liquidity reserve investments.

Portfolio growth will be focused on new primary market investments in eligible sovereign, supranational and agency issued bonds, according to a news release.

The bank has already made €200 million in eligible green bond investments and is a founding member of the Green Bond Principles.

“The green bond market has matured during 2014 and the size and number of offerings has substantially increased, making green securities viable and prudent liquidity buffer investments,” said Deutsche Bank group treasurer Alexander von zur Mühlen, in a news release.

Marking the portfolio launch, Deutsche Bank invested in the new 10-year green bond issued by the World Bank (International Bank for Reconstruction and Development).

“Landmark green issuances from triple-A issuers such as the World Bank further enhance the appeal of the green bond market, promoting investment in sustainable projects that mitigate the effects of climate change at commercially appealing returns,” von zur Mühlen said.

World Bank green bond

Washington, D.C.-based World Bank launched the $600 million, 10-year fixed-rate global green bond on Thursday. It is the bank’s largest U.S.-denominated green bond and also its longest-dated green benchmark in this currency, according to a news release.

The bond has a coupon of 2.125% and the settlement date is March 3.

Joint lead managers were Deutsche Bank, Morgan Stanley and SEB.

Besides Deutsche Bank, the bonds were placed with 24 additional investors, including AP2, AP4, Blackrock, Mirova, Nikko Asset Management, Nippon Life Insurance Co., Praxis Intermediate Income Fund, United Nations Joint Staff Pension Fund and Zuercher Kantonalbank.

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