Hypo Tirol is set to launch the first Austrian benchmark covered bond in social format after investor calls today (Tuesday) and tomorrow, with the Austrian bank having mandated an inaugural €500m no-grow 10 year mortgage Pfandbrief and unveiled a framework targeted at affordable housing.

The issuer announced its plans today, mandating ABN Amro, DekaBank, Erste, LBBW and UniCredit, the latter also being sole social bond structuring advisor. Launch is expected in the near future, subject to market conditions, after investor calls scheduled until tomorrow.

The new issue will be the first benchmark covered bond in green, social or sustainable format from Austria. The only previous Austrian covered bond issuance in this sector was a €300m four year for Kommunalkredit Austria in 2017.

With the issuance of social bonds, Hypo Tirol intends to showcase its contribution to social responsibility, especially vis-à-vis capital market participants, according to the bank’s social bond framework.

“The goal is to address those capital market participants that place a special focus on social aspects in their investment decisions,” it says. “In non-profit housing — an important target group of Hypo Tirol — the social component of affordable housing is realised in conjunction with the achievement of high environmental standards.”

Among the segments of affordable housing encompassed by Hypo Tirol’s framework are: non-profit housing; housing subsidies and refurbishing with social and family-policy-related objectives; and providing local communities with affordable and high-quality housing. The bank maps these to SDGs 10: Reduced Inequalities and 11: Sustainable Cities & Communities.

Second party opinion provider ISS ESG affirmed that the use of proceeds make a significant contribution to the SDGs and that the overall sustainability quality of the social asset pool in terms of sustainability benefits, risk avoidance and minimisation is good. Hypo Tirol has a C, Prime, rating from ISS ESG, which ranks it 23rd out of 277 companies within its sector.

The social asset portfolio amounts to €602m and is part of Hypo Tirol’s mortgage cover pool.

Hypo Tirol’s last euro benchmark was a €500m seven year in October 2019. The last euro benchmark covered bond in social format was a €500m five year for KEB Hana on 19 January.