Issuance peaked at fresh highs during the third quarter

By James Langton |

The green bond market set a new record for quarterly issuance in the third quarter (Q3), according to data from Moody's Investors Service.

The global green bond issuance hit record highs in Q3, pushing the issuance total for 2017 so far past the total for the full year of 2016.

During Q3, 83 issuers brought 111 transactions to market, generating US$32.7 billion in global issuance, Moody's reports.

"Total green bond volumes for the first nine months of the year hit US$94.5 billion, a 49% increase over the US$63.2 billion of issuance during the first nine months of 2016," says Matthew Kuchtyak, analyst with Moody's, in a statement.

Issuance during Q3 was driven by corporates, with $18 billion worth, representing over half (55%) of the quarterly issuance volume. Almost all of the corporate issuance (93%) was rated investment grade.

"We continue to observe marginal increases in speculative-grade issuance, though this remains a small portion of the total green bond market," Kuchtyak adds. "Following 5% of rated issuance in the first quarter and 6.4% of rated issuance in the second quarter, speculative-grade green bonds represented 7.2% in the third quarter."

For full-year 2016, 1.4% of green bond issuance was speculative grade compared to 6.1% year-to-date 2017. This trend highlights the maturation of the green bond market globally as issuers with a wider range of credit quality are participating in the market, Moody's says. Similarly, the growth of emerging market green bond issuance also signals the market's maturation, it notes.