Morgan Stanley claimed this title as a result of serving as lead or joint lead manager on 26 green, social or sustainability (GSS) bonds with a total value of about $4.4 billion last year. This is estimated to be 34% of the par amount and 22% of the individual transactions in the GSS muni market.
Most of these transactions were green bonds, but the firm has also pioneered the use of the 'sustainability bond' label in the US muni market and claims to be the first US muni bond underwriter to encourage mapping to the Sustainable Development Goals.
The company was a founding signatory of the Green Bond Principles, and has played a significant role in educating investors about the market and helping launch deals from multilateral development banks, corporates and agencies as well as municipalities.
Since the first green US muni issue – a $100 million offering from the Commonwealth of Massachusetts – local governments across the US have raised a combined sum of more than $45 billion from GSS bonds, according to the Environmental Finance Bond Database.
"Our states and cities are simultaneously addressing substantial infrastructure and housing gaps as well as the many challenges presented by climate change," said Zachary Solomon, executive director of Morgan Stanley's public finance group, in a recent paper.
Although muni bonds have traditionally been aimed primarily at retail investors, 2019 saw significant demand from institutional investors. "Appetite for the debt is increasing among all types of investors," said Solomon.
Notable green muni bond transactions in which Morgan Stanley was involved last year include:
- A $643.5 million bond from the San Francisco Bay Area Rapid Transit District to fund improvements to the city's mass transportation network and boost its resilience against earthquakes. These securities also received Climate Bonds Initiative (CBI) certification.
- A $570.6 million deal from the Massachusetts Water Resources Authority to finance the construction and improvement of various wastewater and drinking water projects throughout the state.