Manchester-based Co-operative Bank Finance announced it priced its issue of green MREL-eligible £250 million fixed rate reset callable notes due 2027.
MREL stands for “Minimum Requirement for own funds and Eligible Liabilities.”
Goldman Sachs International and NatWest Markets Plc are the joint lead managers for the issuance.
“The notes will bear interest at a rate of 6% per annum, payable semi-annually in arrears from and including the issue date to (but excluding) 6 April 2026,” said Co-operative Bank.
“Thereafter, interest will be reset to the sum of the 1 year SONIA mid-swap rate and the margin.
“The bonds are expected to receive a rating of ‘B1’ from Moody’s.
“The net proceeds of the issue of the bonds or amounts equal thereto will be used by The Co-operative Bank p.l.c. for financing and/or refinancing, in whole or in part, Eligible Green Assets in accordance with its Green, Social and Sustainability Financing Framework, which, together with the Second Party Opinion from ISS ESG, is available on the group’s website.”
Co-operative Bank CEO Nick Slape said: “The launch of The Co-operative Bank’s inaugural green, MREL-qualifying bond demonstrates further progress to meet end-state MREL requirements by 1 January 2023.
“Our bank has provided our customers with a real ethical alternative for 150 years and the deployment of our Green, Social and Sustainability Financing Framework in this transaction compliments our long-standing commitment to support a more sustainable economy.
“The funds raised will finance initiatives that drive meaningful environmental change which are aligned to specific UN Sustainable Development Goals and in keeping with our promise to protect and improve biodiversity and the environment.”