Czech Billionaire Considers Niche Bonds to Boost ESG Access

Central and east Europe’s most creative bond issuer CPI Property Group SA may blaze another trail for the region and sell international notes with coupons tied to sustainability targets.

The company, owned by Czech billionaire Radovan Vitek, is “studying” options for potential placements of sustainability-linked bonds in euros or other currencies, Chief Financial Officer David Greenbaum told Bloomberg News.

The owner of offices across Berlin, Warsaw and Prague is looking for ways to continue accessing the ethical-debt market ahead of potential European rule changes that could make some of its properties ineligible for traditional green bonds. It would join issuers including Tesco Plc, LafargeHolcim Ltd. and Chanel Ltd. in accessing the tiny, but fast-growing SLB market.

“We expect our green assets to grow over time, but a portion of our portfolio, particularly older buildings, will not be eligible,” said Greenbaum. “Sustainability-linked bonds are a way for the company to maintain a sustainability mindset for future issuance, but linked to the group’s overall performance against targets.”

CPI has no immediate plans to issue after it refinanced the vast majority of its debt maturing through 2024, Greenbaum said. The company’s main office is in Prague.

Its 1.5% note due 2031 was offered at 99.326 at 11:21 a.m. in London, according to Bloomberg data. That’s almost a euro higher than the level at which it priced on Jan. 19.

The real-estate group was the first company from central and east Europe to issue hybrid bonds in 2018 and it has sold green debt in three different currencies. Polish utility Tauron Polska Energia SA sold the region’s first sustainability-linked notes last year in a local-currency deal.

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