I'm at the Bloomberg New Energy Summit in New York, and we've had green bonds green bonds green bonds on the agenda - that's good news.
But talk today is all about yesterday's bond from Iberdrola - EUR750m, BBB, 8.5 years - and how it was four times oversubscribed! That's right, four times as many orders as they could fill - and they hadn't even bothered with a roadshow.
Whoa! That's what you call a market signal.
US company SolarCity has priced a solar bond backed by cash flows from a pool of 6,596 mainly residential solar panel systems and power purchase agreements in California, Arizona, and Colorado.
Expected bond figure is $70.2 million, but the bond doesn't close until Thursday this week. Interest rate is 4.59%. Credit Suisse is structurer and sole bookrunner.
Swedish construction company Skanska last week issued their first green bond at SEK850 million. The use of proceeds will be ‘exclusively allocated towards investments in green commercial property development’. Swedish bank SEB was sole bookrunner.
By Bridget Boulle
As part of our Q1 roundup, here is the league table of the largest underwriters in 2014 so far. With USD9bn of issuance to date, it’s been a BIG and there are plenty more deals to come.
If you've been reading the latest reports from the IPCC, you would have been reminded that the global shift to a low-carbon (and climate resilient) economy needs to happen fast, real fast.
In particular it has to happen in the countries that are building vast energy systems, especially China and India. But different financing tactics are needed in different economies.
In the high interest rate-climate of places like India, the cost of capital can add up to two-thirds of the lifetime financing cost of a solar plant. Cut commercial interest rates in half to even developed world higher-risk levels, say 6%, and you can save up to a third the lifetime cost of the asset.
By Bridget Boulle
It’s been another ground breaking quarter for green bonds – the biggest yet with just under USD9bn issued ($8.997bn). It seems our initial estimate of $20bn for the year will be met much sooner than we thought so we’ve revised it to $40bn (there are no rules).
There have been new issuers, new currencies, new underwriters, new areas of issuance and, for the first time, a green bonds index. All good things, here is a summary...
The development banks led the way for the quarter but not by too much: development banks = USD4.9bn while corporates = USD4.03bn (it may seem quite a big gap but the first corporate bond was only issued in Nov 2013 while the Development bank market has been going since 2007).
Firsts...
Today we publish our report on:
"Growing a Green Bonds Market in China
Reducing costs and increasing capacity for green investment while promoting greater transparency and stability in financial markets".
In the meantime you can read their media statement at: http://td.mediaroom.com/2014-03-28-TD-leads-environmental-commitment-with-the-TD-Green-Bond
BTW, Royal Bank of Canada is holding a green bonds forum in Toronto next Wednesday. Could it be that TD was trying to head off their arch-competitor?
This week leading Swedish personal care and forest products company Svenska Cellulosa AB (SCA) released their first green bond at SEK 1.5 billion ($232 million). It was issued in two tranches: one SEK 1 billion floating rate note at three-month STIBOR +0,68% and one SEK 500 million fixed rate tranche at 2.5%. The bond has been issued under the company’s Euro Medium Term Note program.
By Bridget Boulle
The European Investment Bank (EIB) has launched its first Sterling Climate Awareness Bond, a GBP500 million, 6 year bond. This is the 9th Climate Awareness Bond EIB have issued so far this year (including taps) putting them at the top of the 2014 issuer pile with $2.94bn so far.
