Strong demand and keen pricing mark global record green bond issuance from the Republic of France.
Investor demand has seen France’s initial foray into sovereign green bonds surpassing all expectations, creating a world record green bond issuance at EUR7Bn (USD 7.5bn) June 2039 green OAT (GrOAT), with more to come.
Spotlight on Sovereigns in 2017
While initial focus has been on the long tenor of the French offer, the size of this initial tranche has implications for future sovereign issuance. In addition to Poland and France, another seven nations have publicly foreshadowed sovereign issuance in 2017 including Sweden, Nigeria and Morocco.
“France went to market looking for EUR 3bn, a week ago it said it wanted a minimum of EUR 2.5bn. It’s printed EUR 7bn — talk about evidence of demand. How many sovereigns are now going to be thinking, ‘we need to do this’? This provides a fantastic template for other governments.“
“France went to market to support liquidity. It said it would be a benchmark sovereign issuer to help create the market.”
“With this EUR 7bn print all sorts of issuers will benefit. France did it for the public good — not for the French treasury — and that’s a lesson for all governments.”
“You have to say, ‘Bravo, Bravo, mes amis en France!”
The Last Word
With estimates for 2017 green bond issuance ranging from USD 130bn to near USD 200bn, this USD 7.5bn record size green bond from France makes a healthy January. Now for the next sovereign to step up and investors to again demonstrate their desire for good quality green product.
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