Linklaters advises underwriters for the European Commission’s largest-ever social bond

  • At €17 billion, the deal is the largest amount ever borrowed by the European Commission
  • The European Commission’s first Covid-related bond

Linklaters has advised the underwriters on the largest-ever social bond issued by the European Commission (‘the Commission’). At €17 billion, the Commission’s inaugural Covid-related social bond is the largest ever bond issuance under the EU SURE programme – the European instrument for temporary Support to mitigate Unemployment Risks in an Emergency.

The transaction also recorded the largest-ever order book for a bond sale across any sector, with demand reaching €233bn – nearly 14 times the amount the Commission aimed to raise from the issuance.

Melinda Perera, lead Partner, Capital Markets and Banking Linklaters LLP Luxembourg said:

“The issuance of this unprecedented social bond and the response it has received from the market is further proof of the growing demand from investors to align their investment strategies to a more socially sustainable future, particularly in these extraordinary times.”

The Linklaters team was led by Melinda Perera (Partner), Delphine Horn (Consultant), Laura Mbo (Associate) from the Luxembourg Capital Markets and Banking team and included Johnny Davidson(Managing Associate) from the London Capital Markets team.

Linklaters has been at the forefront of the growth in the green bonds market, advising on some of the leading offerings in recent years, Russian Railways (Russia and the Commonwealth of Independent States’ first), Link Real Estate Investment Trust (the world’s first green convertible bond in the real estate sector), the Government of Hong Kong (its inaugural US1bn Green Bond, listed on both the London Stock Exchange and the Hong Kong Stock Exchange), Egyptian Ministry of Finance (the first sovereign green bond in the Middle East and Africa region, listed on the London Stock Exchange (LSE) and admitted to the LSE’s dedicated Sustainable Bond Market) and DTEK Renewables (the first ever green bond issuance by a Ukrainian issuer).

Linklaters has also led the development of the related sustainability-linked bond market, advising on recent issues by Suzano (the first bond of its kind to be aligned with the ICMA’s sustainability-linked principles published in June 2020), Novartis (the first sustainability-linked bond to incorporate social rather than environmental targets and the first offering of sustainability-linked bonds in the healthcare sector), ENEL (the first sustainability-linked bond in Europe) and Europe’s first sovereign sustainability bond (the €1.5bn 0.0% sustainability bonds due in 2032 was issued by the Grand Duchy of Luxembourg and listed on the Luxembourg Stock Exchange).

Linklaters’ sustainable (green and social) bond practice and experience spans its European, North American and Asian offices and draws on the support of the firm’s market-leading corporate, environment and climate change, energy and financial regulation practices.