Global issuance of green bonds grows 67% in first 3 quarters

Global green bond issuance is on track to top $250 billion this year, according to the latest data from Moody’s Investors Service (all figures are in U.S. dollars).

The ratings agency reported that $63.9-billion worth of new green bonds were issued globally in the third quarter, bringing the year-to-date tally to $189.5 billion.

Moody’s said that issuance is now on track to easily exceed its forecast of $200 billion for the year, and could come in at more than $250 billion.

“Issuance for the first nine months of this year was 67% higher than during the same period in 2018, and 2019 issuance eclipsed full-year 2018 issuance of $171.1 billion in September,” said Moody’s analyst, Matthew Kuchtyak.

Corporations were active green bond issuers in the third quarter, Moody’s said, generating almost half (48%) of total issuance volume, which is up from 42% in the second quarter.

At the same time, Moody’s reported that the issuance of social and sustainability bonds declined sharply in the third quarter. New issuance in this segment was $7.9 billion, down from the record $19.7 billion issued in the second quarter.

Despite those weaker volumes, “with continued growth and diversification in investor demand for sustainable investments, we expect demand for social and sustainability bonds to persist alongside demand for green bonds,” Kuchtyak said.

Moody’s forecasted that the issuance of sustainability-linked loans and bonds will increase in the years ahead, “as they allow issuers to highlight the broader sustainability objectives of their organizations while retaining the flexibility of general corporate purposes borrowing.”

It said the growth in these kinds of transactions “will complement, rather than restrict, the growth of the labeled green, social and sustainability bond markets over the next few years.”

Staff

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