Crédit Agricole Italia is set to launch the first Italian green covered bond and only the second euro benchmark from Italy of 2021 early next week, a €500m no-grow long dated OBG with energy efficient buildings as use of proceeds, following investor calls today (Friday).

The issuer (formerly Cariparma) announced its plans this morning, mandating group investment bank Crédit Agricole as green structuring advisor and bookrunner for the inaugural green covered bond, with the other leads yet to be named. Launch is expected early next week, subject to market conditions.

The transaction will reference the Crédit Agricole Group green bond framework supplemented by a specific appendix prepared by Crédit Agricole Italia on eligibility criteria for green residential real estate in Italy. Independent real estate specialist CRIF was mandated to align eligibility criteria with the top 15% most carbon efficient buildings in the country, and has developed two approaches, based on EPC and the year of construction.

“By issuing the contemplated green covered bonds to refinance residential green buildings,” said second party opinion provider Vigeo-Eiris, “the issuer coherently aligns with its sustainability strategy and commitments, and addresses some of the main issues of the sector in terms of environmental responsibility.”

Crédit Agricole Italia’s last euro benchmark was a €1.25bn dual-tranche, eight and 25 year trade in January 2020. The only obbligazioni bancarie garantite (OBG) to be launched since then is a Mediobanca €750m 10 year transaction on 13 January, which is the only Italian benchmark so far this year.

Mediobanca’s new issue was launched at 13bp over mid-swaps and was today quoted in the context of 6bp, according to a syndicate banker, who suggested it would be the most relevant comparable as the most recent OBG. He saw Cariparma September 2031s issued in 2016 at 5bp and January 2038s issued in 2018 at 11bp, but said these are illiquid and squeezed.

Crédit Agricole Home Loan SFH launched a 10 year €1.25bn debut green covered bond in November 2019.