International law firm Simmons & Simmons has advised banks operating in Munich on the issuance of the first Social Bond of a major European city. The bond has a volume of € 120m, a term lasting until November 2023, and an interest rate of 0.25%. The transaction was led by Bayerische Landesbank (technical lead) and UniCredit Bank AG (structuring of the sustainability component), and was accompanied by Stadtsparkasse München as co-lead.
The city bond is traded on the Munich Stock Exchange and is intended for both institutional and private investors. Unique to this bond is that it follows the so-called "Social Bond Principles" and the proceeds of the issue will therefore be used by the City of Munich primarily to create affordable housing.
The Simmons team consisted of Dr Felix Biedermann (Partner, Frankfurt) and Dr Gabriele Röhl (Counsel, Frankfurt).
Partner Dr Felix Biedermann commented:
"With this first "Social Bond" of a major European city, the City of Munich and the participating banks demonstrate how modern municipal finance can look like today. The consideration of social and sustainable aspects is becoming more and more important in the financial world. Our team is already well positioned to advise on these topics".
