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By Tom Porter
LONDON, Jan 3 (IFR) - The Republic of France has mandated
banks to lead manage an inaugural Green bond, the second such
deal from a sovereign issuer.
Credit Agricole, which is sole structuring advisor, and
Morgan Stanley will arrange a series of investor calls and
meetings to introduce the sovereign's Green bond framework.
The euro-denominated trade will be issued in the 15 to
25-year part of the curve and will follow a roadshow starting
Government agencies, corporates and banks issued
US$81bn-equivalent in the Green format in 2016, according to the
Climate Bonds Initiative. Yet, until a 750m five-year from the
Republic of Poland in December 2016, sovereigns had been notably
absent from the asset class.
The issuer's first sovereign Green bond issue did not appear
to offer a pricing benefit against its vanilla curve, though it
brought new investors to the issuer.
A lead on France's debut would not be drawn on whether the
sovereign could expect a pricing benefit but said the Green
aspects of the deal would likely pull in more investors than a
standard OAT print.
"The Poland deal was relatively small and relatively short,"
said the banker. "The key point here is that this is an OAT; the
format is the same and it will be targeting benchmark size for
France's implied 15-year yield went up in secondary trading
following the announcement on Tuesday morning, from 1.05% to
1.13%, according Tradeweb data.
The same banker said the country's 20-year spreads were
around 20bp over mid-swaps and its 30-year spreads in the low
40bp area over mid-swaps on Tuesday morning in London.
Barclays, BNP Paribas, Credit Agricole, Morgan Stanley,
Natixis and Societe Generale are joint lead managers.
France is rated Aa2/AA/AA/AAA.
(Reporting by Tom Porter, Editing by Helene Durand, Philip