LONDON, Oct 10 (Reuters) - German energy company Innogy said it will reallocate the proceeds of its 850 million euro ($978 million) green bond to grid projects from renewables, due to its bonds being transferred to E.ON under the terms of an asset swap.
Green bonds are fixed-income securities which raise capital for projects with environmental benefits, such as renewable energy generation, low-carbon transport or grid upgrades so that renewable energy can be transported.
Innogy issued its first green bond in October last year to refinance one onshore and four offshore wind farms.
The deal between Innogy’s parent RWE and E.ON will mean the assets of Innogy will be divided between them.
E.ON will acquire Innogy’s regulated energy networks and customer operations while RWE will take on the renewables businesses of both E.ON and Innogy.
Innogy’s bonds will be assumed by the new E.ON group, the company said in a statement.
$1 = 0.8694 euros Reporting by Nina Chestney; Editing by Elaine Hardcastle