The Massachusetts AA+ green bond I mentioned last week got a lot of coverage on release this week - even the WSJ ran the story. But there was a twist: it seems the State had to scale back the total $1.1bn GO offering to $670m on tepid demand, but the green bond bit was 30% oversubscribed.
For all you prospective issuers out there: the green bonds also lured as many as 9 new institutional investors for Massachusetts bonds. One buyer went so far as to say “We think more municipalities should do the same". So perhaps this is Massachusetts starting a trend yet again?
Mind you, for those of us concerned about climate, Massachusetts is applying a broad interpretation of "green", as State Treasurer Steve Grossman said to BloombergTV. The bond has more of a Parks & Recreation focus than the IFC / World Bank flavours that inspired them, with only a subset of allocations looking like they would qualify under the Climate Bond Standard.
Cut to Climate Bond Standard board member, California State Treasurer Bill Lockyer:
One important point: Massachusetts say they will be putting effort into transparency for investors via website reporting - good on them.
