SUMMARY - A record-breaking year for climate bonds

The Climate Bonds Initiative (CBI) released a summary of a "record-breaking year by all metrics" for green bonds, with issuance of USD 81 billion (EUR 76bn), up 92% on 2015 figures.

A maturing of the green bonds market, diversification across issuers, products and use of proceeds are the main trends identified in the Green Bonds Highlights 2016 summary, available here.

The Big Numbers

92% – growth on 2015 making 2016 the most prolific year to date

USD 11.8 billion – November issuance, the largest month on record

24 – number of countries with green bond issuers

27% – proportion of Chinese issuers

241 – number of labelled green bonds issued (median size USD 133.7 million)

>90 – number of new issuers

>50 – number of repeat issuers

USD 4.3 billion – largest single green bond ever issued from the Bank of Communications (China)

1st Sovereign – Republic of Poland became the world’s first sovereign issuer

Green Bonds in 2017

HSBC’s preliminary estimate for 2017 green bond issuance ranges up to USD 120 billion, Moody’s is around USD 200 billion and the CBI forecast is that 2017 green bond issuance will reach USD 150 billion. The organisation points to three things to watch for in 2017:

1. More issuance from sovereign and sub-sovereign issuers as governments try to mobilise green investment and support market liquidity.

2. Policy developments will push green finance even further as the G20 nations prioritise climate action. This will also encourage greater harmonisation of green bond guidelines across markets.

3. Over-subscription of green bonds and tight pricing will remain and we expect to see more issuers from lower rating bands coming to market.

(USD 1 = EUR 0.94)

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