Groupe BPCE has issued a €750 million senior unsecured five-year bond, the first to be assigned the Euronext European Defence Bond label.
Proceeds will be used to finance and refinance the assets of European defence and security sector-related companies and to fund contracts around the development, manufacturing and production of specialised equipment.
Euronext’s European Defence Bond label was created in July to increase private capital allocations to European defence and security projects. Through the voluntary initiative, Euronext aims to establish a common framework to identify bonds financing eligible activities and increase transparency in defence and security-related debt instruments.
Upon its launch, Euronext highlighted the increase in defence and security industry action in Europe following geopolitical shocks. This label, and increased long-term private capital investment in the sector, will support the EU’s autonomy and resilience, it suggested.
Eligible debt instruments are subject to a fast-track admission process for the label.
More than 140 investors expressed interest in the bond, and the order book was oversubscribed at €2.8 billion. It was distributed by Natixis Corporate & Investment Banking (Natixis CIB).
On the issuance, Groupe BPCE stated, “As part of its Vision 2030 strategic project, Groupe BPCE is committed to the defense sector to address sovereignty challenges.
“This issuance is in line with the actions taken in favour of defence, such as the recent update of the defence and security sector policy for all of Groupe BPCE’s banking activities, as well as the agreement signed in June with the European Investment Bank to mobilise €300 million in loans for French SMEs in the sector.”
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