Mediobanca has priced a EUR 300 million Sustainability Tier 2 bond, marking the Italian investment bank's fourth foray into the ESG capital markets and its first time attaching a sustainability label to a Tier 2 instrument. The transaction lifts the bank's total ESG bonds outstanding to EUR 1.8 billion across four issuances since 2020, the bank confirmed in its Green and Sustainability Bond Report published in March 2025.
The deal represents a broadening of Mediobanca's sustainable finance toolkit. Where earlier issuances were structured as senior or green instruments, the Tier 2 format carries regulatory capital recognition, meaning the bank is now embedding ESG criteria directly into its loss-absorbing layer — a step that remains relatively rare among European banks.
GREEN MORTGAGES ANCHOR THE ELIGIBLE POOL
Proceeds from the bond will be allocated to an eligible pool that is heavily weighted towards green mortgages originated by Mediobanca Premier, the bank's private and personal banking arm. Green mortgages account for 75% of the allocated portfolio, equivalent to EUR 1,157 million, with the remaining 25% directed to social categories. The split reflects a deliberate choice to channel retail mortgage flows, which carry a clear link to building energy performance, into the bank's ESG reporting perimeter.
The bond is aligned with five of the United Nations Sustainable Development Goals: SDG 3 (Good Health and Well-being), SDG 7 (Affordable and Clean Energy), SDG 10 (Reduced Inequalities), SDG 11 (Sustainable Cities and Communities) and SDG 13 (Climate Action). Mediobanca said the SDG mapping reflects both the environmental credentials of the green mortgage pool and the social dimension of the remaining allocation.
With green mortgages forming the backbone of the eligible portfolio, the bank is effectively recycling capital from one of its fastest-growing retail product lines into externally verified sustainable instruments — a structure that allows it to deepen the ESG label across its balance sheet without requiring large-scale asset origination outside its existing business mix.
FOUR ISSUANCES IN FIVE YEARS
The latest bond underscores a trend among mid-sized European banks of integrating sustainability criteria into capital instruments that go beyond vanilla senior debt. By labelling a Tier 2 note, Mediobanca is signalling that its ESG commitments extend to the portion of its capital stack that would absorb losses ahead of senior creditors, giving sustainability-focused investors access to a higher-yielding instrument within the same framework. The bank said in the report that it intends to continue expanding its ESG bond programme in line with the growth of its eligible asset pool, and that the combination of green mortgage growth and the social allocation — covering categories aligned with SDG 3 and SDG 10 — provides sufficient depth for further issuances under its existing framework documentation.
The March 2025 transaction is Mediobanca's fourth ESG bond in five years, a cadence that has built the EUR 1.8 billion outstanding figure steadily since the programme's inception in 2020. Each successive deal has expanded either the format, the eligible asset categories, or both — with the Tier 2 structure representing the latest evolution. The bank's annual bond report provides investors with allocation and impact data across all four issuances, a disclosure practice that has become standard for repeat ESG issuers in the European market. Mediobanca noted that the proportion of the eligible pool attributed to green mortgages has grown as Mediobanca Premier expanded its origination footprint in recent years, giving the bank a credible and growing pipeline of assets for future allocations.