Climate Bonds Blog

Posted: Nov 21, 2013

Electricité de France (EDF) today set a new high for a green bond - a benchmark-sized EUR1.4 billion (nearly $1.9bn). A terrific achievement.

The bond was two times over-subscribed - so I guess that's another EUR1.4bn that's still looking for a green home.

Ratings are A+ S&P / Aa3 Moody’s / A+ Fitch. The bonds are tied to EDF's renewable energy assets - which makes them a climate bond in our eyes.

EDF closes humdinger EUR1.4bn green bond, A+, 7.5yr - 2 x oversubscribed. Wow! This is how investors vote.
Posted: Nov 21, 2013

The UK Government announced today they will join the US and Scandinavian countries in agreeing to end support for public financing of new coal-fired power plants overseas, except in "rare circumstances in which the poorest countries have no feasible alternative".

UK Govt announces it's joining US, Scandis, World Bank, EIB to end overseas aid support for coal power and stop other MDBs. First test: EBRD's Kosovo coal plant
Posted: Nov 20, 2013

Speaking in London today, Mark said: "Green securitization is an enormously important area we need to address if we're to successfully  scale up finance to tackle climate change."

“The securitization of loan portfolios for renewables, energy efficiency loans and  smaller scale climate debt opens up the opportunity to more quickly recycle bank capital - and equity - and so support more projects. Importantly , if investment grade, institutional investors can add these products to their mainstream bond portfolios”


Former Deutsche Bank Climate Change Advisors head of research, Mark Fulton, joins Climate Bonds as a Senior Fellow, working on green securitization
Posted: Nov 20, 2013

FinanceAsia reports that Chinese renewable energy generation company GCL-Poly has privately placed a USD200 million, 0.75%, 5 year convertible bond with PAG Investments.

GCL-Poly, also the largest supplier in China of polysilicon for solar cells, is 20% owned by Chinese sovereign wealth fund CIC.

HK's GCL-Poly goes convertable solar
Posted: Nov 20, 2013

According to the Financial Times yesterday, Zurich Insurance has decided to invest up to $1 billion into green bonds that finance projects aimed at mitigating climate change and climate change adaptation.

Cecilia Reyes, chief investment officer at Zurich, which manages more than $200bn of total assets, said the company wanted "to improve liquidity in the $11bn green-bond market, stimulate interest from other investors and encourage new issuers". Good on them.

Zurich Insurance allocates $1bn to green bond investing; mandate goes to BlackRock
Posted: Nov 20, 2013

Bank of America raised $500 million in the first sale by a US bank issuer of green bonds. Expect this to be a dam-breaker - now we just need to make sure the myriad banks and corporates that will surely follow comply with robust standards and that green credentials are reviewed by qualified third party actors.

 

The interest rate was 1.35 percent, 80 basis points more than US Treasury bonds of a similar nature. Bloomberg report that the bond is likely to be rated Baa2 by Moody’s.

Bank of America closes their own 3yr, Baa2, $500m green bond - a US first
Posted: Nov 20, 2013

Vasakronan is a Swedish property company with investments in Stockholm, Uppsala, Gothenburg, Malmö and Lund. They've just issued a SEK 1.3 billion Green Bond, with the proceeds going to finance upgrades of some existing buildings and new building construction to LEED Gold or better, or BREAM certification. Vasakronan properties have an energy consumption which is apparently 47% below average.

Swedish property group Vasakronan issues SEK1.3bn ($197m) Green Bond - theme goes corporate
Posted: Nov 16, 2013

For those non-bankers among you, over-subscription means getting more orders than you can fill - in the case of most climate and green bonds this year, way more.

Kommunalbanken (KBN) had USD840 million of orders from over 40 investors, 58% of which were "socially responsible investment (SRI) portfolios". Given the number of times central banks appearing on green bond buyer lists (see below), everyone's turning into an SRI buyer nowadays. And that's the way it should be.

Yet another over-subscription as Norway's Kommunalbanken closes its USD500m AAA 3yr green bond @0.75%. With demand this strong and rates this low, perhaps we can get on with rebuilding the world's infrastructure?
Posted: Nov 16, 2013

Last week we blogged that SolarCity and Credit Suisse were about to issue a new $54.4 million, climate bond – a rooftop solar lease securitization. It’s out: BBB+, 4.8%, 13 years. The long tenor is interesting – and great. And S&P’s BBB+ rating suggest those credit analysts may be beginning to understand solar.

This bond has been long-awaited by the green finance sector, who are hoping it’s the harbinger of things to come.

This week’s $54.4m, BBB+, 13yr solar rooftop lease securitization bond was a ground-breaking success
Posted: Nov 14, 2013

I've just arrived in Warsaw for a round of climate finance meetings and talks alongside this year's UN Climate Negotiations (COP19); I'll be reporting. But the first thing I have to report is not about the Conference, but about the Host: the Polish Government.

The Host Government is meant to lead the negotiations. But unfortunately Poland would seem to be doing exactly the reverse. Apart from what's going on inside the negotiations (and remember Poland has been blocking tightening of the EU's emission targets), contemplate these:

COP19 letter #1: Oh that Crazy Polish Government!