After a period when capital markets had been severely restricted or unavailable, Anglian Water’s approach to financing has been to position itself strategically in many different capital markets to diversify across different ratings and geographies so that in the event one market closes another can be relied upon for financing. As such, the Canadian market was a strategic addition to Anglian’s sources of financing, a move that was helped by CPP Investments, a Canadian pension plan that owns 32.9% of the company.
Anglian Water also has a commitment to raise 100% of its debt financing as sustainable – matching the right environmental projects to the Maple issuance was a critical part of the strategy. The Strategic Pipeline Alliance (SPA) programme was ultimately chosen – at 310 miles, SPA is the UK’s largest onshore pipeline project and features several innovative qualities to reduce the embodied carbon footprint, such as being able to transport water in both directions, eliminating the need for a redundant set of pipes. The treasury team worked closely with the water services and SPA teams to understand and communicate the project’s benefits and innovative qualities to investors.
The Anglian Water treasury team also played an essential role in timing the company’s entrance into the Canadian debt market, which was paramount to the transaction’s success. After having actively monitored the global financial markets in the months leading up to the financing, the team chose to engage Canadian investors – and ultimately access the Canadian debt market – over the quieter summer period, which was characterised by limited competing supply and an attractive Canadian pricing dynamic relative to Anglian Water's home market.
The transaction stood out in a quieter year for new debt issuance because of a number of its distinguishing characteristics, including the green designation, the rarity value offered to investors by Anglian Water's first issuance in the Canadian market, and the attractive pricing that was achieved. Achievements include:
The in-person marketing initiative organised alongside Scotiabank and TD Securities was essential, as it introduced Anglian Water to the Canadian investor base. Ultimately, 89% of the investors who purchased the offering (by allocation) participated in the marketing initiative. The transaction's green label was also instrumental in supporting the best outcome, as 76% of investors were ESG-focused.
“In a very competitive category, the Anglian Water bond stood out as the first-ever green Maple bond in the Canadian market, helping the company to diversify its investor base while providing financing for a strategically important project.”
GreenSquareAccord
The judges highly commended GreenSquareAccord in this category. GSA’s inaugural public bond was successfully executed at a time when few transactions had taken place and the market was volatile. GSA issued a £400m, 25-year bond at a coupon of 5.25% under its newly launched sustainable finance framework, with ESG metrics aligned to reductions in Scope 1, 2 and 3 greenhouse gas emissions.
Aviva plc
The judges highly commended Aviva plc, which issued a £500m Contingent Convertible Restricted Tier 1 hybrid bond in June 2022. This was the first time Aviva plc has issued a bond with this level of flexibility in favour of the issuer and the first GBP hybrid issuance by an issuer since the start of the war in Ukraine. The bond also showcased Aviva’s strong ESG credentials.
