Green bond issuance “shatters” record

Green_investmentsGreen bond issuance this year could reach at least $125 billion (€116 billion) and potentially $150 billion.

The estimate, from Christopher Flensborg, head of climate and sustainable financial solutions at Nordic bank SEB, comes after issuance in the first quarter to March 26 “shattered” the previous year’s record of $15.4 billion.

Green bonds are like conventional bonds but companies, governments and other organisations use them specifically to fund environmental projects.

First-quarter Issuance rose by 67% to $25.7 billion, buoyed by the €7 billion French sovereign green bond, which overcame a 70% decline in Chinese issuance.

However, Chinese authorities have signalled that its green bond issuance this year would be strong.

SEB recently issued its own green bond.

Lombard Odier recently said the green bond market had grown 159% year-on-year since 2013.

In March BlackRock announced the launch of a green bond fund.

Luxembourg, the cross-border fund centre, is also a major centre for green bonds issuance.

SEB also said green securitisations have increased by 230% year-on-year, rising to nearly $2 billion.

Corporate green bond issuance featured nearly sustained issuance levels compared to the record set in the first quarter of 2016, but with “an intriguing and almost identical swap in distribution between financial sector issuance (including real estate) and corporate non-financial issuance”, said Flensborg.

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