MARKET NEWS
Financial Times, French green debt fetches a premium from investors
Research conduced by the Association for Financial Markets showed that investors paid a premium for the French sovereign green bond in a latest sign that ‘a pricing differential is emerging’ for the GB market.
The green bonds were sold at maturities of 21 and 22 years but fetched yields that were comparable to conventional 16-year French debt, AFME found.
South China Morning Post, French asset manager Amundi to create high-yield green bond market through US$1.42 billion fund, Georgina Lee
World’s largest targeted green bond fund focused on emerging markets has an ambition to boost allocation to green bonds by 100% by bringing into the market a new class of high-yield green bonds.
[…] Today, most of the green bonds are either triple, or double-A rated, offering low yields. By bringing emerging market issuers we will deepen the green bond market, and in turn attract more investors,” Jean-Marie Masse, chief investment officer at IFC.
Governing, Green Gold Rush, Liz Farmer
The story of the US muni green bonds market in a magazine widely read by state and local government officials in the USA.
(…) the [green] bonds have the potential to attract a fresh set of investors at a time when tax reform has created fewer incentives for banks and insurance companies to buy municipal bonds. Some even think that green bonds will someday be cheaper for states and localities to issue than general obligation debt.
AM Watch, VIDEO: Interview with Climate Bonds Initiatives' Sean Kidney
In an video-interview with AM Watch Sean Kidney talks about grim future world faces because of the cumulative effects of climate change and lists actions that need to be undertaken to stand a change of tempering the worst of it. The question of “how do we engineer this” brings the conversation to green bonds, that as Kindey says, have to be a “hop, skip and jump story”.
Global Capital, European sovereign DMOs not convinced by green bonds, Jon Hay
Still only few countries issued a sovereign green bond. Government officials discussed the matter at the Euromoney Global Borrowers and Bond Investors’ Forum in London.
Among large banks, issuing green bond now seems almost de rigueur, but that is certainly not the case for governments.
The Market Mogul, Green Bonds: too much of a good thing?, Flavia Micilotta
Author outlines discussions that took place at the Environmental Finance’s Fixed Income & ESG and Green Bonds Europe Conference where an official from Belgian Debt Agency suggested a creation of green credit rating for sovereigns to facilitate the issuance process.
Providing a clear ‘green’ rating alongside a country rating would also stimulate countries to continuously improve their performance, Leclercq suggests. Capitalising on the positive message green bonds give today, linking concrete policy dynamics with sustainability objectives of corporates and governmental administrations, creates a clear virtuous circle.
The Edge Markets, Bonds: Renewable energy sector performing well despite setbacks, Kuek Ser Kwang Zhe
Sean Kidney in an interview with The Edge Markets’ journalist explained reasons for slow down in green bonds issuances in the first half of the year and talked about possible impact of Trump administration’s actions on the global renewable energy sector.
Kidney, however, does not think Trump’s actions will have a significant impact on the global renewable energy sector. Even in the US, several states have continued to pump in more efforts in their cities to prepare for the future.
The Asset, ESG Podcast: Guidance needed to nurture the green bond market
Rahul Ghosh, senior vice-president, ESG and green bonds, Moody’s Investors Service, explains why government policy is key to spurring growth
Environmental Finance, Green bond market to break $200bn barrier in 2018
40% of EF’s Fixed Income Conference attendees that participated in a digital poll believe that green bond market will grow above USD225bn this year.
And 88% of respondents said the green bond market needed to eventually converge around a single standard
Global Capital, Green covered bond supply expected to rise, Bill Thornhill
Findings of latest Standards & Poor report in Global Capitals.
The proportion of green covered bonds in the market could rise substantially as regulators push for greener finance and banks focus increasingly on financing of green assets according to report published this week by Standards & Poor.
GreenBiz, How common standards could spur growth in green finance, Leonie Schreve
Author, Head of Sustainable Finance at ING, makes a case for common standards in the green bonds market.
While issuers and investors have managed admirably with a voluntary patchwork of existing frameworks to date, a new set of commonly adopted standards is key to the continued expansion of green markets. If these standards put the emphasis on process over content, it should create better conditions for green markets to thrive in future.
Renewables Now, Work starts on green bond criteria for low-carbon grids
In June, Electrical Grid Technical Working Group under Climate Bonds Standard started work on developing low energy transmission, distribution and storage criteria for green bond investment.
The aim of the criteria will be to help determine when grid infrastructure projects and assets are consistent with the Paris goal of keeping warming below 2 degrees C and are eligible to be certified under the Climate Bonds Standard.
ASIA NEWS
Euromoney, China fuels green bond take-off, Allen Cheng
A captivating story of the green finance innovation in China intermingled with ‘behind the scenes’ of China green finance. We get an insight into work of ICBC’s research team performing mathematical modeling on the impact of green finance on China’s economy or E&Y’s 70 green finance accreditation and verification experts.
Chinese authorities have not only set up a national financial system for issuing green finance but have also worked with industry to establish mechanisms of accreditation and verification to ensure that green-bond issuers are keeping their promises by implementing their environmental pledges, particularly the reduction of carbon emissions and pollutants.
The Business Times, Can green bonds help power emerging Asia's fixed income markets?, Monish Mahurkar
Author of the article remarks that only few Asian countries outside of China issued green bonds and lists steps necessary to undertake to start up this market in “emerging Asia”. He also argues for “a systematic adoption of ESG factors and scoring frameworks by investors.”
(…) incorporation of environmental, social and governance (ESG) factors through consistent scoring frameworks is the next frontier in mainstreaming sustainability across the fixed income space. This represents an opportunity for both issuers and investors in the Asian bond markets.
Nikkei Asian Review, Green bonds take root in Asia, Takeshi Kihara
Nikkei looks briefly at Asian nations’ efforts to finance transition to a low carbon economy and points to local investors’ craving for reliable green finance products.
They [green bonds] are finding a receptive audience. A survey by the United Nations-backed Principles for Responsible Investment found that institutional and other investors named climate change as the greatest long-term challenge driving their decisions, more so than resource depletion and population shifts.
Live Mint, Building India’s green finance ecosystem, Kaku Nakhate
Author, Bank’s of America India country head, says that green infrastructure in India needs to be funded by innovative financial instruments such as green bonds and lists a specific recommendations for regulatory change that would allow this market to flourish.
[…] the current regulatory restrictions allow insurance companies and pension funds to invest only in AAA-rated bonds. This regulatory framework should change in order to provide a fillip for green bond issuances. To deepen the green bonds markes in India, the government should actively consider making them tax-free.
Global Trade Review, Lenders eye potential of Asia’s sustainable finance market, Finbarr Bermingham
Following his conversations with industry experts, author of the article shares a number of interesting insights into the green finance landscape in Asia Pacific.
Meanwhile, Agrocorp, another trader, is monitoring the market closely. “Something that’s of interest to us is that certain players have been able to obtain discounted financing by making commitments to sustainable sourcing, ensuring practices comply with environmental standards. That’s something we’re looking to see if we can do ourselves,” Vishal Vijay, head of business development, tells GTR.
The Strait Times, Demand for green bonds set to soar in Asia
The publication cities the Singaporean government executive stressing the importance of standards to boost the investor confidence in the green bonds market.
But while the demand is evident, more clarity is needed in the standards of debt instruments - called green bonds - to boost investor confidence, added Mr Ng, MAS' assistant managing director, development and international group.
COUNTRY NEWS
NIGERIA
In an effort to support the development of a domestic green bond market in Nigeria, CBI alongside FMDQ OTC and the Financial Sector Deepening Africa launched the Nigeria Green Bond Market Development Programme – an event widely covered by media outlets in Nigeria and beyond.
FTSE Global Markets, Nigeria launches green bond market development programme
The Nigeria Green Bond Market Development Programme (NGBMD) was launched today, aimed at the development of a domestic green bond market in Nigeria and fostering the issuance of corporate/non-sovereign green bonds
CPI Financial, Nigeria Green Bond Market Development Programme lauches to boost African Green Finance, Matthew Amlôt
The Programme is part of a wider cooperative partnership between FMDQ OTC, Financial Sector Deepening Africa (FSD Africa) and Climate Bonds Initiative to grow sustainable and green investment within the Nigerian debt capital markets.
The Guardian Nigeria, Ambode seeks more OPS involvement in fight against climate change, Helen Oji
He [Lagos state Governor, Akinwunmi Ambode] said that the green bond programme if well articulated and implemented would unlock the potentials of the Nigerian renewable energy sector and put it on a sustainable growth trajectory.
Business Day, FMDQ, CBI, FSD Africa launch Green Bond programme, Endurance Okafor
The Programme will support the development of guidelines and listing requirements for green bonds in Nigeria, develop a pool of Nigeria-based licensed verifiers to support issuers, facilitate engagement with extant and potential issuers and investors (…).
ProShare Intelligent Investing, FMDQ Partners FSD, Climate Bonds to Launch Nigeria’s Pioneer Green Bond Market Development Programme
According to her [The Director, Climate Bonds Initiative Justine Leigh-Bell] “ We are very excited about this significant milestone. Working with FMDQ and FSD Africa will provide a platform to open up the Nigerian economy to a wider investor universe as we commence our journey to the local capital markets by entrenching financial instruments such as Green Bonds”.
SINGAPORE
The Monetary Authority of Singapore (MAS) and IFC signed a Memorandum of Understanding in which they committed to work together to grow the green bonds market in Asia.
The Straits Times, MAS partners IFC to spur green bond market in Asia, Jamie Lee
In a memorandum of understanding signed on Thursday, the two agencies said that would encourage green bond issuances by financial institutions in Asia by raising awareness and knowledge of finance professionals on green finance issues.
The Asset, Singapore partners with IFC to accelerate growth of Asian green bonds
“We believe Singapore, as the rising financial hub of Asia, is well placed to catalyze the funding of low carbon investment and financing in the region and be at the forefront of this growing asset class." says Vivek Pathak, IFC's director for East Asia and the Pacific in a joint media statement.
LeapRate.com, IFC and MAS to accelerate growth of green bond asset class in Asia, Valentina Kirilova
Mr. Ng Yao Loong, Assistant Managing Director, Development & International Group, MAS, added: “Green bonds are gaining traction in Asia. The region now contributes about a quarter of global green bond issuances annually. MAS is pleased to partner IFC to help promote Asia’s green bond journey.(…)”
HONG KONG
Xinhua, Hong Kong's gateway role particularly important in green finance: monetary authority, Xiang Bo
Hong Kong role in channeling the finance from international investors to China’s mainland stressed in a report released by Hong Kong Monetary Authority.
Hong Kong has always been the gateway between the Chinese mainland and the rest of the world, serving as the preferred location for international investment in the Chinese mainland bond market as well as for mainland issuers to raise bond financing, and the same applies when it comes to green bonds, said a report (…)
The Asset, ‘From experience’ green adds to long-term asset value, says HKMA
Chief executive of one of the world's largest asset owners (HKMA) urged attendees to the 2018 Green and Social Bond Principles annual conference to get involved in green finance saying that investing in green is a driver of long-term value.
"Contrary to some perception that investing in green undermines return, our experience shows that many green investments that are good for the environment can also be good for investors over the long term,"
South China Morning Post, Hong Kong’s dim sum bond market to pivot towards eco-friendly fundraising, Georgina Lee
With the decline in the dim sum market, Hong Kong government continues to emphasize that its banking sector welcomes issuers from China interesting in bringing Chinese green bonds to foreign investors.
Earlier this year, the government introduced a HK$800,000 per issue subsidy for issuers that use its third-party verification “green finance certification scheme” run by the government-owned Hong Kong Quality Assurance Agency (HKQAA).
COVERAGE OF CHOSEN MAY’S GREEN BOND ISSUANCES
CPPIB – FIRST GREEN BOND FROM A PENSION FUND
World’s first green bond from a pension fund issued by Canadian CPPIB was a focus of media attention in June.
Financial Times, CCPIB to become first pension fund to issue green bond, Jennifer Thompson
The CPPIB plans to invest more than C$3bn in renewable energy and said wind and solar, sustainable water and waste management projects as well as buildings designated ‘green’ would be eligible to receive investment from whatever the eventual bond raised.
Bloomberg, Canada Pension Sells $1.2 Billion Green Bond in Global First, Maciej Onoszko
The pension fund, which boasts the highest credit score at the three largest rating firms, priced C$1.5 billion ($1.15 billion) of green bonds Wednesday in what it called the first green bond sold by a pension fund globally.
BNN Bloomberg, CPPIB breaks record with green bond offering, Maciej Onoszko
CPPIB’s new debt will dethrone Ontario’s securities due 2025 as the country’s largest green bond in Canadian dollars.
City A.M, CPPIB becomes world's first pension fund to issue green bonds, Josh Mines
CPPIB, which handles a total of $356.1bn assets, says the sale will put more than C$3bn into the renewable energy sector through environmentally friendly products.
International Financing Review, CPPIB branches out into Green territory
Investments & Pensions Europe, CPPIB to increase investments in renewables via green bonds issue
Poul Winslow, a senior managing director and global head of capital markets and factor investing, said: “The issuance of Green Bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer amongst pension funds in this regard.
Pensions & Investments, Canada Pension Plan Investment Board to issue green bonds, James Comtois
The sale of the bonds will provide CPPIB with additional funding as it plans to increase its holdings in the renewable energy sector and energy-efficient buildings.
Global Capital, CPPIB lines up for green debut, Lewis McLellan
The Canadian agency has mandated CIBC Capital Markets and RBC Capital Markets to run the books for a fixed rate Reg S Canadian dollar denominated green bond.
PV Magazine, Canada Pension Plan Investment Board world’s first to issue Green Bonds, Marian Willuhn
The growing acceptance for renewable energy assets from sovereign wealth funds indicates a solid and healthy business climate for renewable energy, and could have positive effects for the industry in the future.
ICBC CERTIFIED BOND
Global Capital Asia, ICBC follows bank FRN trend for green deal, Morgan Davies
Industrial and Commercial Bank of China’s London branch issued a $1.5bn-equivalent green bond on Tuesday becoming the third big Chinese bank to hit the offshore debt market with floating rate notes in less than a week.
The Financial, ICBC London Lists $1.58bn Equivalent Green Bond
The green bond, part of ICBC’s $10 billion MTN programme, is the largest ever green bond listing on London Stock Exchange and the first Chinese issuance on ISM.
The Asset, ICBC prints second green bonds in dual currency FRNs, Chito Santiago
The offering has obtained a Climate Bond Initiative certification from the Climate Bonds Standard Board on 28 May 2018.
Renewables Now, London Stock Exchange welcomes its biggest green bond from China's ICBC
"The record size and London listing from ICBC is a pointer for large institutional investors to the scale of green finance opportunities increasingly evident in China & now appearing throughout Asia as emerging economies address their climate, green infrastructure and sustainable development challenges," said Sean Kidney, chief executive of the Climate Bonds Initiative.
AUCKLAND COUNCIL CERTIFIED BOND
Scoop Business, Auckland Council to launch $200m green bond offer to fund electric trains, Sophie Boot
Auckland Council will open a $200 million green bond offer next week, which it says will be used to buy more electric trains and equipment and refinance existing debt from electric trains.
The SpinOff, Auckland Council wants you to help them buy new trains, DonRowe
The bonds offered by Auckland Council are Climate Bond Certified, which is a Fair Trade-like labelling scheme for bonds consistent with the 2 degrees Celsius warming limit in the Paris Agreement.
TMB BANK – FIRST GREEN BOND FROM THAILAND
PV Tech, Thai bank issues country’s first green bond raising US$60 million for renewables, Tom Kenning
Major Thailand-based financier TMB Bank has issued the country’s first green bond, with the World Bank's IFC as the sole investor of the US$60 million bond, the funds of which will be used exclusively to finance climate-smart projects, particularly renewable energy.
The Asset, TMB Bank issues Thailand’s first green bond, Chito Santiago
The pioneering green bond offering, announced on 7 June, will expand funding for private sector investments that help address climate change and will provide an alternative source of long-term green finance in the country
Dealstreet Asia, IFC invests $60m in green bonds issued by Thai lender TMB, Mars Woo
The subscription forms part of IFC’s proposed $150-million financing in the Bangkok-based bank, which was established in 1957 as Thai Military Bank.
IFC’S MABUHAY BOND – FIRST PESO-DENOMINATED GB
Business World, IFC raises $90M via first peso green bond issue
The International Finance Corporation (IFC) has issued $90 million worth of peso-denominated green bonds called the “Mabuhay Bond,” marking its first foray into the peso debt market.
Business Inquirer, IFC issues Mabuhay bonds, Ronnel W. Domingo
“Adding pesos as a new green bond currency supports our goal to strengthen this important asset class,” IFC vice president and treasurer Jingdong Hua said in a statement.
Dealstreet Asia, IFC issues $90m worth of first peso-denominated green bonds, Mars Woo
The green bonds have a 15-year maturity and the IFC said it will use the proceeds to finance the capital expenditure program of the Energy Development Corporation (EDC), an integrated geothermal steam and electric power producer in the Philippines.
