It’s been another ground breaking quarter for green bonds – the biggest yet with just under USD9bn issued ($8.997bn). It seems our initial estimate of $20bn for the year will be met much sooner than we thought so we’ve revised it to $40bn (there are no rules).
There have been new issuers, new currencies, new underwriters, new areas of issuance and, for the first time, a green bonds index. All good things, here is a summary…
The development banks led the way for the quarter but not by too much: development banks = USD4.9bn while corporates = USD4.03bn (it may seem quite a big gap but the first corporate bond was only issued in Nov 2013 while the Development bank market has been going since 2007).
- New development bank: Canadian Export Development Bank
- Four new corporate issuers: Toyota, Unilever, SCA, TD Bank
- Transport sector green securities: Toyota with an ABS linked to electric and hybrid vehicles
- New currencies: GBP, CHF
- Green Bond Index released by Solactive (a Climate Bonds Partner). It includes mostly labelled issuance as well as some project bonds.
Top 5 issuers for the quarter
- EIB = $2.9bn
- Toyota = $1.75bn
- World Bank = $1.3bn
- Unibail-Rodamco = $1bn
- TD Bank = $452bn
EIB has continued to prove its worth as the hero development bank by being by far the largest issuer, almost double Toyota. They issued six times (some taps of existing bonds) in 5 currencies – CHF, EUR, ZAR, GBP and SEK.
Demand has been very strong particularly with new issuers:
- Canadian Export Development Bank: $500m orders on $300m bond in 15 min
- Unibail Rodamco: 3.4x oversubscribed
- Toyota: upsized from $1.25 to $1.75
- Unilever: 3x oversubscribed
- SCA: 50% oversubscribed
Bridget Boulle is Program Manager at the Climate Bonds Initiative, an “investor-focused” not-for-profit promoting long-term debt models to fund a rapid, global transition to a low-carbon economy. Bridget has worked in sustainable investment for 6 years, most recently at Henderson Global Investors in the SRI team.