Amounts in thousands of EUR | 2022 | 2021 |
|---|---|---|
Subordinated Tier 2 instruments: |
|
|
Subordinated Green Bond (institutional investors) | 248,336 | 247,930 |
Subordinated Bond (retail investors) | 6,432 | 6,769 |
Interest payable | 5,116 | 916 |
Balance sheet value as at 31 December | 259,884 | 255,615 |
In 2021, Triodos Bank realised a successful placement of a subordinated Green Bond. The Green Bond has a nominal value of EUR 250 million, a tenor of 10.25 years, and a coupon of 2.25% for the first five and a quarter years after which there is an option to early redeem the bond. If the bond is not early redeemed, the interest rate is reset to maturity at 2.4% above the annual Euro mid swap rate. The Green Bond has been placed below nominal value at 99.497%. The placement of the Green Bond results in an increase of the Tier 2 Capital which is a diversification of the Total Capital of Triodos Bank.
The Green Bond has been issued taking into account the ICMA Green Bond Principles, Climate Bond Initiative Standards and the EU Taxonomy recommendations. It has been assessed by a Second Party Opinion as best market practice on all components. This confirms Triodos Bank’s ambition to ‘finance change and change finance’ and underlines its position as frontrunner in sustainable banking.
The movement of the subordinated Green Bond issued is as follows:
Amounts in thousands of EUR | 2022 | 2021 |
|---|---|---|
Balance sheet value as at 1 January | 248,796 | - |
Issuance | - | 247,868 |
Amortisation | 406 | 62 |
Interest payable | 4,207 | 866 |
Balance sheet value as at 31 December | 253,409 | 248,796 |
The 10-year Triodos Bank UK Ltd. bond (retail investors) was issued in 2020 by Triodos Bank UK Ltd. The bond was issued at nominal value in GBP. The annual interest coupon is 4% for the first five years after which there is an option to early redeem the bond. If the bond is not early redeemed, the interest rate is reset to maturity at 3.9% above the Bank of England base rate. The bonds are subordinated to all other liabilities.
The movement of the Triodos Bank UK Ltd. bond issued is as follows:
Amounts in thousands of EUR | 2022 | 2021 |
|---|---|---|
Balance sheet value as at 1 January | 6,819 | 6,368 |
Issuance | - | - |
Amortisation | - | - |
Interest payable | -7 | 50 |
Exchange rate difference | -337 | 401 |
Balance sheet value as at 31 December | 6,475 | 6,819 |
Accounting policy
Subordinated debt is initially measured at fair value minus incremental direct transaction costs, and subsequently measured at their amortised cost using the effective interest method.