Clifford Chance

Clifford Chance advises on APICORP's inaugural green bond

Clifford Chance has advised the joint lead managers on Arab Petroleum Investment Corporation's (APICORP) debut green bond issuance comprising U.S.$750 million Notes due 2026 (the "Notes") under its Global Medium Term Note Programme. Following close on the heels of the establishment of APICORP's Green Finance Framework, the transaction was exceedingly well-received by investors with an orderbook of around U.S.$2.2 billion and the spread settling 10 basis points tighter than the initial price guidance.

In accordance with APICORP's Green Finance Framework, proceeds from the issuance will be applied by APICORP for financing or refinancing new or existing projects in eligible categories encompassing: (a) renewable energy (including transmission, distribution and electrical storage infrastructure as well as local grid connection); (b) pollution prevention and control (including waste collection, waste treatment, waste recycling and composting and anaerobic digestion of waste); and (c) green buildings (including new construction, building redevelopment and/or renovation of existing buildings). In addition, APICORP will seek to specifically exclude the proceeds from being applied towards any projects associated with: (i) nuclear power generation and distribution assets; (ii) coal or gas fired power generation and distribution assets; (iii) fossil fuel related activities, including underlying investments in research and development; (iv) heat or power facilities with emissions intensity above 100gCO2e/kWh; (v) landfill operations and any incineration of any unsorted waste assets or bio-waste; (vi) exploration and development of new oil and gas fields, (vii) road transportation with emissions intensity above 50gCO2/km; and (viii) the aviation, airline and airport industries.

The Notes were issued on a 144A and Regulation S basis and are admitted to trading on Euronext Dublin's regulated market. Barclays, BofA, Credit Agricole, HSBC, JP Morgan, LBBW, Nomura and Standard Chartered Bank acted as the joint lead managers while Credit Agricole acted as the green structuring adviser.

The Clifford Chance team was led by Stuart Ure (Partner, Dubai) with assistance from Alekhya Prakash (Senior Associate, Dubai) and Pearl Mahaga (Associate, Dubai) while U.S. securities law advice was provided by John Connolly (Partner, London) and Chris Osborne (Senior Associate, London).

Stuart comments: "We are proud to have advised on this milestone transaction. Sustainable finance is increasingly gaining momentum in the Middle East region as a result of, amongst other factors, shareholder activism, investor engagement and political mandates. With issuers like APICORP picking up the baton, we see a clear path being forged in terms of issuers across the board considering their energy transition strategies and roadmaps".

Consistently ranked Band 1 in legal directories, Clifford Chance was named Banking Legal Adviser of the Year at the Bonds, Loans & Sukuk Middle East Awards 2021, and Middle East International Law Firm of the Year at the Chambers Middle East Awards 2021. The firm's Middle East banking and finance practice has a strong track record of advising on some of the most innovative and ground-breaking transactions from sovereign, corporate and financial institution issuers and borrowers in the Middle East. This recently includes advising on the world's first sustainable Tier 2 sukuk issuance by Kuveyt Türk, and on the world's first transition sukuk issuance by Etihad Airways. Clifford Chance also advised on Majid Al Futtaim's debut "green" issuance and the first green sukuk issuance by a GCC corporate.