Climate Bonds Blog

Posted: Nov 12, 2013

There has been a bit of interest recently about rapidly expanding options for retail investors to get involved in renewable energy projects. While we still see retail bonds as making a relatively modest contribution to the transition to a low carbon economy, they are important in engaging the public and creating awareness for green thematic investments which can only be good.

Here’s a round up of some of the activity going on in the retail bond market (please note, this is not an endorsement of and product’s credit characteristics, only their environmental ones)...

Good Energy bond 3x oversubscribed

Small bonds roundup... Good Energy 3x oversubscribed, mini-solar bonds, EU+US crowd funding – retail investors want in!
Posted: Nov 12, 2013

Electricité de France (EDF) is planning a Euro bond linked to their renewable energy assets. They’ve mandated Morgan Stanley and Credit Agricole CIB to arrange a series of  investor meetings in Europe over the coming week. No word yet on size. EDF is rated A+/Aa3/A+ (Stable/Neg/Neg) by S&P/Moody's/Fitch.

It seems that EDF have been convinced that self-certification will not fly (hallelujiah), so project eligibility and selection criteria has been reviewed by ESG analysts Vigeo, who did the big Air Liquide bond. Tracking and reporting of disbursements will also be audited by an independent third party – a good development.

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Morgan Stanley & Credit Ag shopping proposed EDF green bond this week / EIB issues 4yr ZAR500m ($48m) climate bond
Posted: Nov 11, 2013

US firm SolarCity announced last week that it was seeking to make a private placement of a $54.4 million, 13 year bond backed by cash flows from rooftop solar leases. SolarCity is the second-largest U.S. solar company by market capitalization.

SolarCity rooftop solar lease securitization nears fruition / If you're in Warsaw @COP19 come and hear me speak at 3 side-events
Posted: Nov 10, 2013

Earlier this week we blogged the issuance of IFC's second $1 billion green bond. IFC's press release about the bond says it "was heavily over-subscribed". IFC vice president and treasurer Jingdong Hua told Environmental Finance. “We had a pretty large book – well over $1.5 billion – and we were able to tighten the pricing. Demand remains strong.”

Buyer details for IFC $1bn + FMO EUR500m: over-subscription, central banks, and more / Just to remind us why we're doing this, WMO says GHG levels reach a high point
Posted: Nov 8, 2013

Kommunalbanken is the Norwegian Government's AAA-rated local government funding agency.

Earlier this week a small announcement appeared that Citi, SEB, Bank of America Merrill Lynch and Morgan Stanley had been mandated to underwrite a debut public US Dollar green bond.

We've heard target issuance is $500 million. We're expecting the bond to come out next week.

Heads up: Norway's Kommunalbanken expected to issue AAA $500m green bond next week
Posted: Nov 7, 2013

FMO yesterday issued a EUR500m, 5 year, “sustainability bond”. FMO's credit rating- and the bonds - is  AAA (negative outlook) from S&P. The coupon (interest rate) was 15 basis points above "mid-swaps".

FMO is the EUR6.3 billion Bilateral Development Bank of the Netherlands. It’s an interesting beast, 51% owned by the Dutch Government, with the rest owned by the big three Dutch banks and a small slice by trade unions, employer associations and motley others.

Lead managers were Rabobank (an FMO shareholder), Credit Agricole CIB and JP Morgan.

Dutch development bank FMO issues EUR500m AAA "Sustainability" bond - sold out in one hour!
Posted: Nov 5, 2013

According to Reuters. the IFC is today pricing their second $1 billion green bond. Coupon is 0.625% (4 basis points over US Treasury bonds).

Lead managers are SEB, Credit Agricole CIB, Citi and Bank of America Merrill Lynch.

IFC today pricing new $1bn AAA 3yr green bond; more expected to follow
Posted: Nov 1, 2013

This is the proposal prepared by Bank of America Merrill Lynch and Citigroup. It was first published in EuroWeek's recent Special Report on Sustainable and Responsible Capital Markets.

Framework for Green Bonds

FYI: full text of Green Bonds Framework - steering c'ttee now set up w. BoAML, Citi, JPM, MS +others in process of joining
Posted: Nov 1, 2013

Earlier this month CitiBank and Bank of America Merrill Lynch (BoAML) launched, via a special EuroWeek report on 'sustainable' capital markets, a "Framework for Green Bonds". This is potentially a big development.

Citi+BoAML promote new Green Bonds Framework; JP Morgan+MS join up; defines a green bond as being about underlying assets not green rating of the company
Posted: Oct 30, 2013

Ontario Premier, Kathleen Wynne is right now speaking at the Willowbrook (metro rail) Maintenance Facility  in Toronto, announcing that Ontario will be the first provincial government in Canada to issue green bonds. The bonds will be to finance “environmentally-friendly” infrastructure projects across Ontario - transit projects in the first instance, hence the metro rail location.

She is also saying that Ontario’s green bonds would “meet international certification and disclosure standards”.

Ontario's Premier announces she is pushing through legislation to allow the Province to issue climate bonds linked to their Metro rail assets