Worldwide issuance of green bonds continued to grow in the second quarter (Q2) ended June 30 and is likely to reach record levels in 2015, according to a new report from Moody’s Investors Service Inc.
The New York-based credit-rating agency reports that green bonds raised approximately US$12.9 billion in Q2, bringing the year-to-date total to approximately US$19.1 billion. The proceeds of these deals will fund a variety of projects, including renewable energy and energy efficiency ventures, financing hybrid and electric automobiles, and public wastewater treatment and drinking water projects, the Moody’s report says.
For the full year, Moody’s expects that global green bond issuance will likely “far exceed” last year’s record volume of almost US$37 billion. “Global green bond issuance broke new ground during the second quarter with a number of first-time issuances, including the first green bonds issued by a YieldCo and in the Baltics,” says Henry Shilling, senior vice president with Moody’s, in a statement.
“We expect additional first-time developments in the third quarter and have already seen the first green bond transaction from a Chinese issuer in July,” Shilling adds.
The Moody’s report says further issuance from China is expected, which will drive the growth in green bond issuance in Asia “as policy-makers embrace such securities as a means of financing their environmental policy goals.”
The vast majority, 95%, of the green bonds that Moody’s rates are investment grade, it notes. In addition, the credit-rating agency reports that green bonds performed in line with global investment-grade bonds in Q2.