CTP Raises €1 Billion Through Green Bond Issuance

CTP, Europe's largest industrial and logistics property company, has successfully priced a €1 billion dual-tranche green bond issuance, reaffirming its focus on sustainability and financial efficiency. The two benchmark bonds of €500 million each have been amortizing benchmark-sized bonds with six-year and ten-year maturities, demonstrating the confidence that investors have in the credit profile and ESG-driven business model of CTP.

The six-year tranche was issued with a 3.625% fixed coupon, priced at Mid Swap +145 basis points, and the ten-year bond had a 4.25% fixed coupon, priced at Mid Swap +188 basis points. The bonds were priced on March 3, 2025, and were listed on Euronext Dublin on March 10, 2025.

By securing these funds, CTP has achieved multiple strategic financial objectives. One of the most significant outcomes of this issuance is the reduction of its average debt cost to 4.0%, a move that enhances the company’s financial efficiency. Additionally, the debt maturity profile has been extended to 5.3 years, which strengthens the firm’s long-term financial stability. These improvements are expected to contribute positively to CTP’s net present value (NPV) and overall financial health.

The net proceeds from the green bond issuance will be used for financing or refinancing qualifying green assets under CTP's Green Bond Framework. This includes green investments in environmentally friendly properties and projects that contribute to the company's overall ESG objectives. In addition, the funds will also be used to retire higher-interest debt incurred in 2022 and 2023, further improving CTP's financial position. This strategic refinancing is likely to improve the company's Interest Cover Ratio (ICR), supporting its capacity to service debt while further building its business operations.

The successful issuance of the bond is an indication of investors' increasing appetite for ESG-tied financial products. As global financial markets pick up pace on sustainability and responsible investing, CTP's success in eliciting robust demand also testifies to its solid credit standing and alignment with investor preferences. CTP's positioning on green finance solutions makes it a leader in the industrial and logistics property sector, where sustainability aspects are gaining the upper hand.

CTP management has been optimistic about the long-term advantages of this strategic decision. By lowering financing expenses and lengthening debt tenure, the company is not only gaining short-term financial benefits but also establishing a solid base for long-term growth. With a reduced cost of capital and enhanced financial leeway, CTP is in a good position to invest in new projects, diversify its portfolio, and continue to dominate the European logistics real estate market.

This issuance coincides with the period of changing regulatory guidelines and investor expectations for sustainability-linked financing. The International Capital Market Association (ICMA) published new guidance on green bonds, sustainability-linked bonds, and sustainability-linked loans recently, offering additional structuring advice for these products to achieve maximum impact. CTP's recent bond issue follows these best practices, reflecting an active policy of embedding ESG factors in its financial strategy.

Looking to the future, CTP continues to focus on using sustainable finance to propel its long-term development and sustainability performance. By structuring its capital in line with its sustainability targets, the company is creating a model for sustainability-conscious financial stewardship in the real estate industry. Investors, meanwhile, are appreciating the worth of sustainability-focused businesses, evident in the robust take-up of CTP's new green bond issue.

With the successful listing of the bonds on Euronext Dublin, CTP has further consolidated its leadership position in ESG-driven real estate financing. The fact that the company was able to complete this large financial transaction during changing market conditions is a testament to its strength and strategic vision. As it continues to grow its portfolio and strengthen its sustainability efforts, CTP's commitment to responsible growth is likely to generate long-term value for investors, stakeholders, and the environment.