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Global Credit Research - 19 Oct 2015
New York, October 19, 2015 -- Moody's Investors Service says that global green bond issuance reached
$7.5 billion in the third quarter of 2015, lifting
year-to-date green bond issuance to $27.2
billion. While down from Q2, Moody's expects issuance
will pick up in the last quarter and exceed $40 billion for the
full year 2015.
"Issuance continued to break new ground in the third quarter in
terms of noteworthy and first-time transactions, such as
the first green bond transaction by a Chinese issuer," says
Henry Shilling, a Moody's Senior Vice President.
"In addition, India has established itself as an early leader
in Asia's nascent green bond market, with three India-based
issuers coming to market in the third quarter," adds Shilling.
"We expect India, along with China, to be a prominent
driver of regional issuance in coming years, given ambitious targets
on building out renewable energy capacity."
Moody's conclusions were contained in its just-released report
on the global green bonds market, "Third Quarter Issuance
Lags, but COP21-Linked Increase Is Likely."
Moody's report highlights that the $7.6 billion issued
in Q3 lagged the $13.4 billion that came to market during
the second quarter of the year, but did outpace the first quarter's
Based on the 9-month average monthly volume of $3.02
billion, green bonds would end the year at $36.3 billion,
or just shy of the $36.5 billion issued in 2014.
However, Moody's expects the volume will pick up towards the
end of the year to coincide with the December United Nations Framework
on Climate Change (UNFCC) Conference of the Parties (COP21) in Paris and
is likely to exceed $40 billion for the full year.
Moody's further notes that nearly half of the third quarter's
issuance proceeds, or about $4 billion, are being earmarked
for renewable energy projects. This is followed by 18.8%,
or about $1.7 billion, earmarked for sustainable water
management followed closely by $1.6 billion allocated to
energy efficiency projects.
Investment-grade issuance continued to dominate in the third quarter,
but high-yield green bonds gained as a share of all Moody's-rated
green bond transactions. Nearly 18% of issuance in the third
quarter was attributable to below-investment grade issuers,
up from just 5% in the second quarter.
Furthermore, green bond performance registered a slight gain in
the third quarter. The Bank of America Merrill Lynch Green Bond
Index posted a total return increase of 0.9%, while
the ML Global Market Index moved up 1.4%.
Nevertheless, it is still difficult to establish differences in
secondary market trading between green and non-green bond issues,
The third quarter also saw more standard-setting initiatives aimed
at bolstering green bonds standards as well as issuance, says Moody's.
These include the publication of the Green Muni Bonds Playbook,
the World Bank Green Bond Impact Report and the Climate Bond Initiative's
proposed eligibility criteria for agriculture, forestry and other
In Q3 2015, 26 distinct issuers came to market with 36 transactions.
Subscribers can access the report here: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_1009140
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Corporate Finance Group
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Moody's: Global green bond issuance lags in 3Q 2015, but likely to rise in Q4
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
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