Munich Re Issues Green Bond in U.S. Market — a First for European Insurer

Following its successful placement of green bonds in 2020 and 2021, Munich Re has sucessfully placed its first green subordinated bond in a private placement to qualified institutional buyers in the U.S. market.

By issuing this bond in the U.S. market segment, Munich Re has succeeded in expanding and diversifying its group of investors, the company said, noting that the bond is the first U.S. dollar-denominated green subordinated bond to be issued by a European insurer in the U.S. market.

The volume of the issue is US$1.25 billion and the bond has a coupon of 5.875%, maturing in 2042.

Munich Re said the green bond underlines its commitment to the Paris Climate Agreement and supports its strategic goal of significantly increasing investments in energy efficiency and renewable energies to combat climate change.

Munich Re will use the capital raised to finance or refinance sustainable projects in accordance with the company’s Green Bond Framework. Projects include investments of equity and debt in renewable energy, energy efficiency, clean transportation, green buildings, sustainable water and wastewater management, the eco-efficient and/or circular economy, and the environmentally sustainable management of natural resources and land.

“By successfully placing its first subordinated bond on the U.S. market, Munich Re has impressively demonstrated its attractiveness for new groups of investors,” commented Christoph Jurecka, Munich Re’s CFO.

“At the same time, the green bond supports the climate targets of our Ambition 2025 strategy,” he added.

The bond was issued to qualified institutional buyers in the U.S. market under Rule 144A and outside the U.S. in accordance with Regulation S of the U.S. Securities Act of 1933.