ING Bank s Green Bond. January 2016

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1 ING Bank s Green Bond January 2016

2 ING Bank green bond In November 2015, ING Bank issued its first green bond, raising around EUR 1.2 billion across 2 tranches. Let s first have a look at the difference between a normal bond and a Green Bond. ING Bank Green Bond Presentation January

3 The difference between a normal bond and a green bond. A green bond legally is the same as a normal senior unsecured bond. However, in the documentation, we commit ourselves to deploy the proceeds in sustainable assets, in 6 categories. Eligible projets ING Bank NV Renewable energy Green buildings Public transport Wind power (onshore and offshore) Solar power Hydro power(small run of river projects) Geothermal power BREEAM minimum Very Good LEED minimum Gold DGNB minimum Silver HQL minimum Excellent Public transport vehicles production Public transport infrastructure Bond proceeds Green Bond proceeds Waste Recycling Re-use of waste (gases) Water Waste water treatment Water recycling Flood prevention (no dams) Energy efficiency Energy efficiency measures Click now for some examples on the next slide ING Bank Green Bond Presentation January

4 Examples of eligible projects ING participated in a 534mn loan to Canary Wharf Group to acquire a landmark building in the London business area Canary Wharf The building was awarded an excellent green building certificate, in recognition of it meeting best practices in areas such as energy monitoring, water consumption and sustainable procurement ING acted as Mandated Lead Arranger to its first offshore wind project financing in Belgium Northwind is a 216MW wind farm project located in the North Sea, providing sustainable energy for 230,000 households, cutting CO 2 emissions by 50,000 tonnes annually Project costs of 851m are financed 70% by senior debt and 30% by shareholder contributions ING co-structured the circa 320m long term debt package of the wind farm Westermeerwind. A near-shore wind park in the IJsselmeer (the Netherlands) which, when completed in 2016, will generate enough electricity for 160,000 households a year Project costs of circa 400m have been financed by 70% of senior debt and 30% by subordinated debt and equity An extensive review was done by the firm oekom, who provided a Second Party Opinion ( SPO )on the sustainability of the assets ING Bank Green Bond Presentation January

5 Highlights from oekom s SPO Sustainability quality of the Green Bond issued by ING Bank NV 1 The Green Bond s formal concept, defined processes and (announced) disclosures are aligned with the Green Bond Principles 2 The overall sustainability quality of the bond and the sustainability performance of the funded assets in terms of sustainability benefits and risk avoidance and minimisation are good 3 The issuer itself shows a good sustainability performance 4 oekom research considers the outcome of all projects to be positive from a sustainability point of view ING Bank Green Bond Presentation January

6 Key aspects of ING Bank s Green Bond Funding our Sustainable Performance 1 Use of proceeds 3 Management of bond proceeds (Re)finance loans to projects in six eligible categories Loans are originated and held by ING s Commercial Banking Lending department Unused proceeds will be held and/ or invested by ING Bank within a separate account of its treasury department, at its own discretion in cash, cash equivalents and/ or other liquid marketable instruments in its liquidity portfolio Minimum of 20% of initial proceeds of the bond will be allocated to fund new transactions On a best effort basis ING replaces assets with other eligible assets in case loans are no longer eligible or repaid early 2 Selection of transactions 4 Reporting Origination from ING Bank front office teams using internally developed Sustainable Finance score cards Second screening by ING Sustainable Finance team through applying the Green Bond Framework and sustainable criteria defined by oekom ING will report on use of proceeds annually in its Integrated Annual Report. Additionally, dedicated Green Bond reporting will be published on our corporate website Reporting will detail allocation of proceeds, total amount outstanding of green bond loans, total amount unused proceeds and environmental impact of the financed portfolio Assurance will be provided by the external auditor of the Integrated Annual Report ING Bank Green Bond Presentation January

7 Issue process How did ING Bank prepare the issue? ING Bank Green Bond Presentation January

8 Issue process These were the teams that helped to bring the green bond to the market Bank Treasury Sustainable Finance Global Capital Markets Legal Financial markets Overall coordination Selection process of assets Structuring and advising Advising on bond documentation Roadshow participant Deal execution Coordination of oekom review Roadshow participant Global Roadshow Coordinator Roadshow participant Advising on oekom s Second Party Opinion But it all starts, and continues with the ING people that underwrite assets Legal Financial Markets FY 2013 FY H 2015 Other projects Renewable energy projects ING Bank Green Bond Presentation January

9 Issue process, the Roadshow During the Roadshow that was organized, we were able to describe ING Bank s green asset underwriting process to 74 investment houses, across 5 regions. ING Bank Green Bond Presentation January

10 The roadshow ING Bank Green Bond Presentation January

11 The result So what was the result? ING Bank Green Bond Presentation January

12 The result We managed to print around EUR 1.2 bln at attractive rates, in 2 tranches, with >70% and > 80% respectively allocated into dedicated green investors or portfolios. EUR investor profile 30% 70% Green Regular USD investor profile 20% 80% Green Regular ING Bank Green Bond Presentation January

13 But also This knowledge adds to the expertise of the departments in Global Capital Markets, enables them to pitch such bond issuance with other Financial Institutions or Corporate Clients. ING Bank Green Bond Presentation January

14 Media coverage The bond s success was also noticed by the press ING Bank Green Bond Presentation January

15 Media coverage ING Bank Green Bond Presentation January

16 Media coverage and by others ING Bank Green Bond Presentation January

17 Media coverage Nominated for Green Finance Deal of the Year Ban ki-moon during the Climate Conference in Paris The private sector also has an important role to play, for example, Global Adaptation and Resilience Investment Working Group, launched by Siguler Guff & Co., will mobilize private sector investment in climate adaptation and resilience. The Working Group is evaluating the potential for a $1 billion investment vehicle that could invest in both developed and developing countries around climate adaptation and resilience. ING has committed to allocate at least 20 per cent of the proceeds from the issuance of a five-year EUR 500 million and threeyear US$800 million green bond to fund new projects, including for resilience ING Bank Green Bond Presentation January

18 The nomination Why should ING Bank s green bond win the ING Sustainability Award ING Bank Green Bond Presentation January

19 The nomination 1 The green bond is a further testament to ING s belief in sustainability, now also looking at the liability part of ING s balance sheet. 2 The bond proceeds are available for a long term, to (re-)finance sustainable assets now and in the future. 3 The process enabled ING to further broadcast its focus on sustainability, to the press, to the investor community and also to (future) wholesale clients. 4 The green bond is a funding tool that is here to stay, to support further sustainable asset growth, and to help diversify ING s investor base. ING Bank Green Bond Presentation January

20 What s next? ING Bank Green Bond Presentation January

21 1 You vote for the green bond to win the ING Sustainability Award 2.and continue to (help) underwrite new sustainable assets ING Bank Green Bond Presentation January