Green wash out

23 July 2015 By Katrina Hamlin Follow @KatrinaHamlin

China’s first eco-friendly bonds push this year’s issuance close to $20 bln. The market has grown fast. But definitions are fuzzy, returns are humdrum, and it’s not clear what problem this solves for corporate issuers, most of whom could sell conventional debt at similar rates.

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Xinjiang Goldwind Science & Technology has begun marketing China’s first green bond, IFR reported on July 16. The three-year, $300 million deal is almost five times oversubscribed, the Climate Bond Initiative said on July 21.

Green bond issuance in the first half of 2015 came to around $18.5 billion, HSBC researchers said on July 5, versus $39 billion in all of 2014. Moody’s says companies and municipal governments were last year’s biggest issuers, making up 46 percent of the total.

New bond sales in 2015 are likely to total around $70 billion but could reach as much as $100 billion, according to mid-year forecasts from the CBI, which promotes investments that tackle climate change.

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