CC advises banks on first-ever European climate bond

Clifford Chance has won a pan-European mandate to advise the underwriters of the first-ever climate awareness bond, which is expected to be worth up to e1bn (£680m).

The firm is advising Merrill Lynch, Dresdner Kleinwort and Unicredit on the sale of the bond, which has been issued by the European Investment Bank (EIB) in 27 European jurisdictions.

Franco Grilli, the Rome capital markets partner coordinating the deal, said the office’s close ties with Merrill Lynch and experience in the retail bond market helped clinch the deal.

“It was generated out of the relationship we have with Merrill Lynch, which was the first bank contracted by the EIB for the transaction,” said Grilli.

The EIB, which used its in-house team on the issue, will use the proceeds of the bond to finance environmentally friendly initiatives.

Strengthening its green credentials, the bond’s yield is tied to the FTSE 4 Good Index of 40 ecological companies, while investors will have the option to redeem their profits in carbon credits.

Clifford Chance is using lawyers from its offices in 11 European countries, who will be working with relationship firms in another 16.

The firm has brought on board Wolf Theiss in Austria and Slovenia, Cechová & Partners in the Czech Republic and McCann Fitzgerald in Ireland.

Grilli said: “It’s based on European law, but there are local peculiarities. That’s okay in three, five or seven jurisdictions, but 27 is a really big effort.”