The major story this week is the huge high-yield green bond from the yieldco TerraForm Power Operating; seeing more high-yield bonds is a sign that the green bond market is continuing to mature. In addition to TerraForm, more green bonds from repeat issuers OPIC, World Bank, IFC and Credit Agricole have been announced and will be closing in the coming weeks. For today, let’s dig deeper into the latest green high-yield offering.
Climate Bonds Blog
Serge Martin is a Canadian philanthropist and founder of SOFINOV, a venture capital fund of Caisse de dépôt et placement du Québec, the largest pension fund in Canada. In 2002, SOFINOV had assets of CA$1.9 billion with an annual compound return of 24.2% since its launch in 1995.
Serge has made a philanthropic commitment of funding of CA$100,000 to support the work of the Climate Bonds Initiative.
We are looking for an energetic Program officer to join our Central London team to coordinate the rapid development of the Climate Bond Standard and Certification Scheme.
The role will involve working with investments banks and potential climate bonds issuers on Climate Bond certifications, consulting with other stakeholders, improving and streamlining>verification processes, training for verifiers, as well as communications of all sorts.
By Ulf Erlandsson, Senior Portfolio Manager Credit, Global Macro Trading, Fjärde AP-fonden/ Fourth Swedish National Pension Fund and Sean Kidney, CEO Climate Bonds Initiative.
Before diving into the latest green bond offerings let’s not forget that green bonds were created because “no challenge poses a greater threat to future generations than climate change” (thanks to President Obama for the eloquent statement). Shifting capital to climate investments through green bonds is one way of addressing the challenge.
Today, I’ve been speaking at the World Future Energy Summit in Abu Dhabi about the potential for green sukuk. A few years ago, if I had said “energy investment” and “the Middle East” in the same sentence, your thoughts would probably spin to oil and gas rather than solar and wind. But there are now some huge renewable energy developments and plans around. (Of course the rationale may be to save more oil for export, but that’s OK – we’re best to fight that fight at the demand side.)
EY (formerly known as Ernst & Young), one of the world’s largest audit firms and the third largest professional services firm in the world (by revenue), has been confirmed by the Climate Bond Standards Board as an approved Climate Bond Standards verifier. EY has 700 offices in over 150 countries.
‘The green bonds market spreads its wings across the globe’, ‘Explosive growth!’, ‘Green bonds enter the game as star players!’ – that’s how some of the journalists described the exciting growth of the green bonds market in 2014. After the impressive year, everyone wonders if ‘the breakneck speed of expansion’ will continue.
There was a lot of media interest around the Australian first Climate Bond Certified bond from the National Australia Bank (NAB) and the first-ever public green bonds list.
Morgan Stanley (MS) tops the Q4 underwriter league table, making $1.1bn of green bond deals during the quarter, with JP Morgan following closely in second place with $887m of deals. Both were carried over the line by big municipal green bonds, which pushed them ahead of staunch rivals Bank of America Merrill Lynch (BAML) and Citi, who come in third ($763m) and fourth ($756m) respectively.
Tomorrow, Sean Kidney (Climate Bonds Initiative), Ben Powell (IFC), Björn Lindström (Vasakronan) and Christoffer Flensburg (SEB) will talk green bonds at a seminar in Stockholm organised by Swesif.
Issuers - IFC and Vasakronan – will give a first-hand report of their experiences with benefits of issuing a green bond compared to an ordinary bond; the processes to ensure the green credentials of their bonds, and the types of projects they financed with the proceeds.