Green bond round-up, 07 February 2018

Channels: Green Bonds

Companies: BNP Paribas, Abu Dhabi Islamic Bank, CIMB Group, Citigroup, Dubai Islamic Bank, HSBC, Barclays, Credit Agricole, ING, JP Morgan, Moody's, S&P, Fitch, NSF Sustainability, American Society for Quality, European Investment Bank, European Investment Bank and China's Green Finance Committee

People: John Shideler, Jennifer Admussen

Belgium to roadshow green sovereign bond

Belgium is expected to commence a series of meetings with investors tomorrow as it officially revealed its intention to issue a green bond "in the near future".

Barclays, BNP Paribas, Credit Agricole, ING and JP Morgan have been mandated to act as joint bookrunners.

Belgium's Green OLO Framework is expected to be released tomorrow. OLO is a traditional bond structure used by Belgium.

Environmental Finance understands the green OLO will be at least €2 billion ($2.47 billion).

It will have a maturity of 15 to 20 years. The roadshow is expected to last for two weeks, with BNP Paribas and Credit Agricole acting as structuring advisors.

Belgium is also going to hold a series of calls with investors outside Europe. The country's first €5 billion OLO benchmark transaction for this year took place in January and was rated Aa3, AA and AA- by Moody's, S&P and Fitch, respectively.

If Belgium issues a green bond, it will become the fifth sovereign, following Poland, France, Fiji and Nigeria.

 

Indonesia completes roadshow and monitors the market

The Republic of Indonesia has completed its roadshow for the issue of its inaugural sovereign green bond.

Environmental Finance understands that the feedback from investors was "very positive" but Indonesia is still "monitoring the market" and waiting for market conditions that are conducive to an issue.

Abu Dhabi Islamic Bank, CIMB Group, Citigroup, Dubai Islamic Bank and HSBC have been hired as joint bookrunners for the US-denominated sukuk offering, which would include a green sukuk transaction.

The size of Indonesia's green bond has not been determined yet, but insiders point out that the country "has the asset base to support a big bond".

 

BNP Paribas updates green bond framework

BNP Paribas has updated its green bond framework but it is not clear if the bank has immediate plans to issue another green bond.

The eligible sectors in BNP's latest framework are:

  • Renewable energies
  • Energy efficiency
  • Mass and public transportation
  • Water management and water treatment
  • Recycling.

The bank has excluded 11 sectors from its eligible projects pool – defence and security, palm oil, wood pulp, nuclear power generation, coal-fired power generation, unconventional oil and gas and mining and tobacco.

By setting up a green bond framework, BNP said it aims to mobilise debt capital markets for climate change and energy transition in line with the Green Bond Principles as it recognises that the world "is at a tipping point on sustainability".

BNP published a green bond framework in November 2016, which was followed by the issue of its sole green bond of €500 million ($529.4 million) a month later

ISO green bond standard 'could be ready by end of 2019'

An ISO green bond standard could be up-and-running by the end of 2019 after a recently formed working group made good progress.

The working group was formed in the autumn when John Shideler, climate services manager at NSF Sustainability, was named as convener, and Jennifer Admussen of the American Society for Quality was appointed secretary.

Shideler said the group has now attracted 20 experts, and more are in the process of joining.

It had its first meeting in Paris in December to discuss a first working draft of the standard. It expects to release the second working draft by the end of February, which will be discussed at its next meeting in New York in May.

Shideler said the ISO standard would most likely look to harmonise existing standards in the market, and is using 'seed documents' including the Green Bond Principles, the Climate Bond Standards and a taxonomy devised by the European Investment Bank and China's Green Finance Committee.

If the positive progress continues, it is possible that the standard will be finalised by the end of next year, which Shideler pointed out would be relatively speedy for an ISO standard.

Nick Roumpis