Green bond issuance hits new monthly record in March

Written by Adam Cadle

25/03/2021

Green bond issuance has hit a new monthly record in March, boosted by sovereign issuance.

With a week left to go, so far this months has totalled €48bn, up from the previous record of €44bn that was set in September 2020. NN Investment Partners (NN IP) has revised its expectations for full-year issuance up to €400bn and this would push the global green bond market well above €1trn by year-end.

“Much of this record-breaking issuance represents planned issuance from 2020 that was postponed as a result of the pandemic,” NN IP's lead portfolio manager of green bonds Bram Bos stated. “Now that we’re on the path to stability, issuers are refocusing on the future and on the ongoing climate crisis.”

Italy entered the green bond market for the first time in March, while France issued its second green bond during the month. Other countries, such as Spain and the UK, are expected to tap the market for the first time later this year.

“Many governments are seeking to play the green recovery,” Bos added. “Green bond issuance can help them raise capital for implementing their infrastructure plans, while simultaneously bringing them closer to achieving their targets under the Paris Agreement.”

NN IP concluded: “Green bonds look set to remain attractive to issuers for the foreseeable future, given current market dynamics. Green issues are increasingly trading inside their regular bond yield curves, demonstrating their appeal to investors, who are willing to pay a so-called greenium for access to these bonds. This in turn makes the green bond market more attractive to issuers, as they face lower borrowing costs.”

Related Articles