China's CGN Wind has issued a one billion yuan, five year bond to finance wind energy developments in Inner Mongolia, Guangdong, Xinjiang and Gansu. Unusually, the interest rate uses a combination of "fixed rate + floating rate", with the floating rate tied to China Certified Emission Reduction (CCER). They called it a “carbon bond”.
Despite the unusual nature of the coupon, the interest rate is 5.65 percent, 46 basis points lower than the similar AAA bonds. The issuer says this is an “indication of the confidence of investors in additional carbon yields”.