A new green retail bond has been issued by the World Bank in conjunctionMerrill Lynch Wealth Management. The bond has 10 year tenor, coupon of 2.32% for the first 5 years which gradually increases to a maximum of 8.82% and is callable after the first year. A very interesting approach, presumably carefully worked out with Merrill Lynch.
The World Bank green bond program's credentials are verified by CICERO.
One characteristic that some financial media coverage has been highlighting is that this was the first green bond issued that has a "callable" structure. The World Bank does like to try things out in the retail space: in 2011 they issued some retail green bonds through the BoAML network, paying a fixed coupon for the first year that switched to a floating coupon after one year (but weren't callable). Earlier this year they issued another structured bond through BNP Paribas. That bond was linked to an equity index.
All part of working out what will fly in the retail space, so others can then pick and run with successful formats.
