05 May 2016
Bank of America Merrill Lynch (BAML) displaced SEB as the biggest green bond underwriter in 2015, helped by its work on a clutch of large corporate issues.
BAML, which helped bring to market deals from Toyota, EDF and Southern Power, topped the Climate Bonds Initiative's underwriters league tables for the first and second quarters, and emerged as the largest underwriter for the year as a whole, with a $4.57 billion share of the market.
The cornerstone of the bank's success in 2015, according to Suzanne Buchta, managing director, green bonds at BAML, was its efforts in the corporate sector, which is growing in importance as the market matures.
"Bank of America Merrill Lynch is focused on structuring and underwriting green bonds from corporate issuers as a means of expanding the market," she says. "Investors have called for green bonds from across the credit spectrum in order to create a scalable market, and we are looking to respond to those demands. As a result, we are the leader in bringing corporate issuers to the green bond market."
Corporate deals the bank worked on have a total value of $6.3 billion, according to figures compiled by Environmental Finance, which represents just over a third of total corporate issuance for the year. They include the two largest corporate green bond deals of 2015 – $1.25 billion offerings from Toyota and EDF Energy.
The bank also worked on the green bond from an investment grade power company, Southern Power, a subsidiary of Southern Company – one of the biggest burners of coal in US.
It also helped the listed subsidiaries of renewables developer SunEdison, TerraForm Power and Terraform Global, hit the market with over $2 billion worth of green notes in 2015.
The bank also worked on some of 2015's biggest deals from sovereigns, supranationals and agencies (SSAs), including NWB's €1 billion ($1.13 billion) bond in September, which at the time, was the largest SSA issue of the year.
The cornerstone of the bank's success in 2015 ... was its efforts in the corporate sector
BAML also made efforts throughout the year to help grow emerging markets, with pioneering work including India's first SSA green bond (Export Import Bank of India, $500 million), Mexico's first green bond (Nafin, $500 million) and Japan's second green bond – from the Development Bank of Japan.
This is a trend that the bank has continued in 2016, with its work on the $500 million Banco Nacional de Costa Rica and Export-Import Bank of Korea's $400 million issue.
The bank, which kicked off 2016 with a return to the top underwriting spot in the first quarter, remains bullish about both its own prospects and those of the market overall.
"BAML is committed to the green bond market because of our passion for mobilising investment capital into the environment," says Buchta. "In 2016 we have already seen, and expect to continue to see, considerable growth in the green bond market relative to prior years."
Green Bonds Europe 2016 Conference
Join us in London on 20 June for our 6th annual Green Bonds Europe conference. Hear from key players and award-winners in this rapidly growing market.
The bank's efforts in the green bond market are part of its wider push into green financing – its Catalytic Finance Initiative – launched in 2014. In June 2015, the bank increased the scale of this initiative with a commitment to grow its environmental business from $50 billion to $125 billion by 2025.
"Our focus goes beyond green bonds and extends to our $125 billion environmental business initiative, and includes the expansion of the Catalytic Finance Initiative to an additional eight partners with a total commitment of $8 billion toward clean energy investment," she added.
|Green Bonds Awards 2016|
|Bond of the Year - corporate||TenneT|
|Bond of the Year - SSA||Nacional Financiera|
|Bond of the Year - municipal||Central Puget Sound Regional Transit Authority|
|Bond of the Year - bank||ING Bank|
|Project bond of the Year||Wind MW (Meerwind)|
|Asset-based bond of the Year||Berlin Hyp|
|Special Award for Innovation (Structure)||Yes Bank / IFC 'back-to-back' transaction|
|Special Award for Innovation (Use of Proceeds)||Schneider Electric|
|Initiative of the Year||The Harmonised Framework for Impact Reporting|
|Personality of the Year||Sean Kidney, Climate Bonds Initiative|
|Biggest Issuer (SSA)||European Investment Bank|
|Biggest Issuer (Corporate)||EDF, Toyota, TerraForm Power|
|Biggest Issuer (Bank)||ING Bank|
|Biggest Issuer (Municipality)||Central Puget Sound Regional Transit Authority|
|Biggest Underwriter||Bank of America Merrill Lynch|