Weekly update: big retail investor demand for World Bank AAA 7yr green bond / Chicago & Mass AAA green water munis / 2 new solar climate bonds from China: LDK & United PV

We're blogging so frequently nowadays we're worried about overwhelming your inboxes - so we're shifting to a weekly roundup format. Let us know how it's working. Of course if something amazing comes out we'll still do a special email.

..... Supranational green bonds

Huge retail demand for World Bank’s latest offering increases size from $15m to $91m in 3 days, 7 yr tenor AAA

Retail investors in Luxembourg and Belgium flooded the order books for the World Bank’s latest green offering last week. Originally intended to raise $15m the bond was significantly increased (after just three days) to $91m. The bond has the same structure as the retails bonds in 2014 with the coupon linked to the Ethical Europe Equity Index.  Tenor is 7 years and it has a rating of AAA from S&P. BNP Paribas were the lead underwriter in the deal. As with all World Bank bonds CICERO has provided a second opinion.

.... Municipal green bonds

Green water bonds are pouring out of the US; recent inaugural issues from Chicago Metropolitan Water Reclamation, $225m, 2-30 years, 2-5%, AAA; and Massachusetts Clean Water Trust, $228.2m, 2-14 years, 1.5-5% AAA

Chicago Metropolitan Water Reclamation (CMWR) issued a $225m inaugural green bond. The bond is split across 32 tranches with a range of tenor from 2 to 30 years and a range of interest rates between 2%-5%. S&P rated the bond AAA. Morgan Stanley was the lead underwriter for the transaction.

Proceeds from the bond will go towards climate adaptation projects such as: pollution reduction, flood control, storm water management; resource recovery; and water reclamation (i.e. recycling) projects. There is no second opinion on the green credentials of the bond; as we mentioned in previous blogs water is a complex topic when it comes to climate change mitigation and adaptation, which would greatly benefit from an expert review to ensure the climate benefits are robust. For example, water projects can be very energy intensive, and we’d like to see more on what they’re doing around energy efficiency for the projects. We’re however comforted by seeing that the Chicago Water district also has an aim to achieve energy neutrality in 2023. Reporting on the bond will consist of the allocation of proceeds and will be posted on CMWR’s website periodically – we hope that they will also include information on aspects such as energy intensity of the projects.


Massachusetts Clean Water Trust is the fourth municipal bond from the state but the first to focus only on water projects. The £228.2m bond was issued across 34 tranches with tenor ranging from 2-14 years and coupons between 1.5% and 5%. Fitch rated the bond AAA.  JP Morgan was the lead underwriter in the transaction.

The bond will fund water and waste water treatment plant upgrades, restoration of an aqueduct and construction of a wind turbine to power a water pollution facility. As Chicago, MCWT chose not to get a second opinion on the green credentials of their bond. However, there is clear process for the management proceeds and commitment to report on the allocation of proceeds through an online annual report.

.... Solar bonds (non-labelled climate bonds)

LDK Solar issues a convertible $264.5m climate bond; 4 yr tenor, 5.5%, B+

Chinese solar manufacturer LDK solar issued a $264.5m convertible bond as part of a company restructuring transaction. The unlabelled climate bond has a tenor of 4 years, rating of B+ and semi-annual coupon of 5.5%.  LDK solar was a leading manufacturer of photovoltaic PV products

United PV (United Photovoltaic Group Limited), US $15m, 3 yr, 7.5%, not rated

Another Chinese solar company, United Photovoltaic Group Limited (United PV) issued $15m convertible climate bond with three year tenor and 7.5% coupon. Fosun International, a large Hong Kong based investment group, was the sole investor in the bond. The bond is not rated by any of the agencies, presumably because it’s small size and single investor.  

United PV owns and operates 13 grid-connected solar power plants across China with an aggregate installed capacity of 467MW. Proceeds from the bond sale will be used to acquire a 20MW solar power plant. The bond comes hot on the heels of a similar $30m convertible bond issued for China Orient Asset Management in December.


Our blogs are written by a team: Sean Kidney, Tess Olsen-Rong, Beate Sonerud, with a bit of help from Justine Leigh-Bell