OVERVIEW - Green bonds mid-year summary 2017

Green bond issuance in the first half (H1) of 2017 reached USD 55.8 billion (EUR 47.5bn) after the second quarter brought a new issuance record of nearly USD 30 billion. Below you can read the overview by the Climate Bonds Initiative (CBI), originally published here.

The investor-focused not-for-profit organisation expects issuance to increase over the rest of the year and possibly exceed the current CBI estimate for 2017 of USD 130 billion. In 2016 issuance stood at USD 81 billion.

H1 TOP ISSUERS AND UNDERWRITERS

The five largest issuers in the first half included the Republic of France with USD 7.6 billion, the European Investment Bank (EIB) with USD 2.8 billion, Germany's KfW with USD 2.5 billion, and Bank of Beijing and TenneT, the transmission system operator (TSO) in the Netherlands and Germany, with USD 2.2 billion each.

Credit Agricole was on top the underwriters league table for the first half. Morgan Stanley is the big mover and with Citi they round out the top three, HSBC coming in a close fourth. Overall, French and US underwriters dominate and Landesbank Baden-Wuerttemberg from Germany made first appearance in the top 15.

Thomson Reuters is providing their league table data for CBI use.

PREDICTIONS FOR THE REST OF 2017

CBI expects sovereign issuance to increase. We have counted eight different sovereigns that have made commitments to issuing green bonds. We are not sure they will all be issued in 2017 but watch out for Nigeria, Kenya and Morocco.

CBI expects Chinese issuance to pick up, exceeding 2016 issuance. We know there have been a lot of deals approved for issuance by People's Bank of China (PBoC), so when the market conditions are right, more issuance will come.

CBI says harmonisation of standards looks increasingly likely. Many conversations have been convened by the Green Bonds Principles and others to strengthen harmonisation between standards, external reviews and Certification schemes. Further, the European High Level Expert Group on Sustainable Finance has published its Interim Report, which among other things calls for an EU wide approach to green standards and labelling.

CBI says guidance on impact reporting may be forthcoming. The Post-issuance Reporting in the Green Bond Market study released in June revealed that impact reporting is on the rise, but that there is little consistency and comparability. Large development institutions have initiated this with the Harmonized Framework for Impact Reporting in 2015 but our view is that this has become a hot topic and we will see more detailed guidance for the corporate market.

(USD 1 = EUR 0.85)

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