We thought it would be a quiet market blog this week. And then this happened…
Bank of China issues a whopping $3bn green bond in three currencies – one of the largest ever to date
So, it was HUGE - but not only huge, it was the first green bond to be issued in three currencies: a USD 2.25bn tranche, a EUR 500m issued in Luxembourg and a RMB 1.5bn offshore in Hong Kong, soaking up investor demand from around the world. Tenors range from two to five years.
According to the verification provided by EY, the proceeds of the bond will be channelled towards renewable energy, pollution prevention and control projects, sustainable management projects and clean transportation. BOC has also engaged EY to assess the social and environmental performance of its Green Bonds. The bond was awarded a score of GB-AAA and classified as Dark Green in the EY Green Evaluation System, with a rating scale from GB-A (Light Green) to GB-AAA (Dark Green).
Lead managers for the USD and EUR tranches were: Bank of China, Bank of America Merrill Lynch, BNP Paribas, China Construction Bank, Commerzbank, Crédit Agricole CIB, HSBC, ING and SEB. Lead managers on the offshore RMB portion were: Bank of China, Citi and Wells Fargo.
Reporting of the GHG emissions will be made on an annual basis in the Annual report and also in a dedicated document, reviewed by EY.
Italian electricity utility Alperia announces its green bond for EUR 225m (USD 250m)
The bond was issued in two tranches: EUR 100m, 7 year tranche (coupon 1.41%) and a EUR 125m 8 year tranche (coupon 1.68%). Proceeds will finance clean energy investments in the North Italian region of South Tyrol, primarily the refinancing of several hydropower plants.
Alperia is a small electricity utility with a total of 41 hydropower plants, 6 district heating plants and 8000km of electricity network. Issued in 2 tranches, this green bond is the only bond they have outstanding, so 100% of their debt is green!
Italian investor, Cassa Depositi e Prestiti subscribed for the EUR 125m tranche.
The bond received an external review from DNV GL here. Goldman Sachs and BNP Paribas were the lead managers. The corporate press release is here.
ABS
Renovate America
Renovate America, provider of residential Property Assessed Clean Energy (PACE) financing in the US, has announced the closing of its seventh securitization of PACE bonds, HERO 2016-2, which amounts to USD 305m.
Renovate America partners with local governments to provide its version of PACE, the HERO Program (Home Energy Renovation Opportunity), to homeowners who finance a wide variety of product installations to conserve water and energy.
The HERO Bond platform is the first asset-backed securities (ABS) platform to solely issue green bonds, each of the company's seven securitizations have been assessed by Sustainalytics. The Green bond framework of HERO 2016-2 has not been made public yet (here is the 2016-1 framework).
Spruce Finance issues USD 83.7m Green ABS
Spruce has just issued a USD 83.78m green ABS backed by a portfolio of 77% unsecured energy efficiency assets and 23% unsecured solar loan receivables. Citi was the sole underwriter of this issuance.
Spruce is a US based private company that provides homeowners with finance for residential solar systems, energy efficiency upgrades and water conservation systems. More information can be found here.
Gossip:
The Treasury Corp of Victoria, Australia announced at our State of the Market 2016 launch event in Sydney this week that it will be issuing a green bond. The marketing road show starts next week. It will be the first Australian semi sovereign to issue a Certified Climate Bond. We expect to hear more in the next two weeks so watch this space.
Suzano Papel e Celulose SA, Brazil’s second-biggest pulp and paper producer, plans to issue USD-denominated green bonds; they could be priced today. This will be the country’s second issuance of green bonds. The proceeds would be used to support clean-energy projects and other sustainable initiatives.
The Credit Guarantee and Investment Facility has announced a new guarantee scheme for green bonds in a bid to address the construction risks faced by investors. The Construction Period Guarantee aims to reduce the risk taken by investors involved in ASDEAN region green infrastructure projects, financed by bonds in local currencies. According to CGIF, this facility will allow project developers to access local bond markets. Here is the press release
India’s National Thermal Power Corporation is planning to issue rupee-denominated offshore green bonds to raise up to USD 250m by the end of July, as part of efforts by India's biggest power producer to enter the renewable energy business.
INTASAVE Energy, is planning a Green/Climate Bond programme to raise USD 30m in order to roll out solar to around 1,500 communities in Kenya, South Africa and Mozambique over the next two years. INTASAVE focuses on practical solution for sustainable development and climate change. Using crowdfunding, it provided two Kenyan communities with solar nano-grid and it is now hoping to raise finance for its next project through green bonds.
Kommuninvest is planning to bring the largest ever green bond in SEK in the third quarter of the year, after debuting in the format with a dollar bond in March. They are aiming for a minimum of benchmark size; in Swedish kronor this is SEK 3bn (USD 364.4m).
Webinar: Solar Green Bonds, Solar Standards and Solar Certification - Making Solar Bonds Brighter - All you need to know: Register now!
Don’t forget to register for the next webinar in our Green Bonds 101 series; we’ll be taking an in-depth look at the Solar Criteria of our Climate Bonds Certification scheme.
Thursday 21st July
Session 1: 9am BST London / 12pm GST Abu Dhabi / 4pm CST Beijing / 6pm AEST Sydney
REGISTER HERE
Session 2: 3pm BST London / 4pm CEST Berlin / 10am EDT New York / 7am PDT San Francisco
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