The EBRD has invested HUF 4.4 billion (EUR 13.2 million equivalent) in covered bonds issued by UniCredit Mortgage Bank ("UCBM"). a mortgage bank fully-owned by UniCredit Bank Hungary ZRT ("UCH"), as part of a total aggregate issuance of HUF 15 billion (EUR 44.2 million equivalent). The bonds are rated Baa1 by Moody's and will be listed on the Budapest Stock Exchange.
With this transaction the EBRD aims to support covered bond issuances of UCMB to facilitate its mortgage lending activities and optimise the funding structure through long-term funding instruments. Furthermore, EBRD promotes resource efficiency in the country by requiring Unicredit Hungary (the parent company of UCMB) to invest an amount corresponding to at least 100 per cent of the EBRD's invested amount to finance green investments in renewable energy projects and/or residential building sectors.
ETI score: 65
The project contributes to the resilience of the financial sector by (i) supporting the Hungarian covered bond market; (ii) strengthening the balance sheet structure of UniCredit Group in Hungary through the reduction of the asset-liability maturity mismatch. The transaction supports the EBRD's Green Economy Transition approach in Hungary with UCH undertaking to invest an amount corresponding to at least 100 per cent of the EBRD investment in covered bonds in GET-eligible projects.
UNICREDIT MORTGAGE BANK COVERED BONDS
UniCredit Mortgage Bank is the third largest mortgage bank in Hungary. It was established in June 1998 and is 100 per cent owned by UniCredit Bank Hungary Zrt.
EBRD Finance Summary
EBRD Finance Summary: HUF 4,500,000,000
Total Project Cost
Total Project Cost: HUF 15,000,000,000
The additionality of the project comes from (i) providing medium- to long-term funding to UCH via covered bonds in an environment of a still developing local capital market for such instruments; (ii) introduction of green financing structure; and (iii) conditionalities, whereby UCBM will be required to follow environmental and social standards for PFIs, anti-corruption and sound AML policies.
Environmental and Social Summary
Category FI (2014 ESP). The client will apply PR2 and PR4 to internal operations, and PR9 and the appropriate EHS Risk Management Procedures to lending activities.
Technical Cooperation and Grant Financing
Company Contact Information
PSD last updated
02 Apr 2020
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to email@example.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email firstname.lastname@example.org to get guidance and more information on IPAM and how to submit a request.