Environmental Finance's Bond Awards 2023

Lead manager of the year, transition bonds: Nomura

In 2022, Nomura established itself as a prolific underwriter of transition bonds.

Nomura oversaw a tenfold increase in its transition bond issuance – albeit from a relatively small base – even as volatile market conditions caused a drop in virtually all other areas of the bond market.

Masahiro GotoThe bank was involved in 25 of the 27 use-of-proceeds based transition bonds issued in 2022, raising JPY401 billion ($3.1 billion), of a total of JPY421 billion raised by Japanese transition bonds last year.

The issuances occurred in the aftermath of the Japanese Government releasing its Basic Guidelines on Climate Transition Finance which provided a basis for a wide range of hard-to-abate sectors to issue labelled bonds for the first time.

An example includes the inaugural transition bond issued by JFE Holdings, a Japanese steel manufacturer, in June 2022. Nomura was the structuring agent of the issuance which totalled JPY30 billion in five-year and 10-year tenors.

The bank also executed transition bonds for issuers from shipping, power generation, heavy industry, aviation, gas, oil, or steel, with many other additional sectors currently under discussion.

Nomura also chaired the GX Business Working Group. The GX League is an initiative of Japan's Ministry of Economy, Trade and Industry (METI) and comprises a wide range of companies from Japan's private sector who are committed to 'green transformation'.

This group aims to establish a framework to evaluate the impact Japanese companies have on climate change and to provide opportunities to transform their operations.

"Nomura's team is delighted to be recognised for its continuing support of pioneering Japanese issuers of transition bonds issued along the technology road maps which define carbon neutral pathways," commented Masahiro Goto, global head of investment banking at Nomura Holdings.

"We firmly believe that for the world to have any chance of achieving Paris Agreement targets it is key to expand transitional finance to support companies that are making steady GHG reduction efforts in line with a long-term strategy to achieve a decarbonised society."

Nomura is also an active member of the International Capital Market Association Climate Transition Finance Working Group.