Asia has been slow to grasp green bonds but there are signs that issuers are beginning to consider this type of financing, especially for infrastructure projects. But the sector faces a struggle as environmental concerns remain low on the list of priorities.
Bank of China has racked up another first with the inaugural green covered bond from the mainland. The deal’s unique structure garnered international attention, supporting the country's pursuit of leadership in green bonds.
After three years of arduous development by the International Finance Corporation, the first 'forests bond' hit screens on Monday, and the issuer hopes to come back for more.
Hong Kong rail operator MTR Corp sold its debut green bond on Monday, attracting orders worth $1.4bn. The deal saw strong support from European accounts in particular, thanks to the rarity and quality of the credit.
Modern Land (China) Co ventured out with its maiden green bond on Thursday. It not only achieved the largest size for its dollar bonds to date, but also paved the way for the country’s property developers to come to the international green debt market.
Green finance in China, particularly the domestic green bond market, has taken off this year, in part to the strong policy support from the Chinese government. At a roundtable in early September, GlobalCapital and some of the market’s leading figures discussed the recent developments in China, including incentive schemes and whether the government’s top-down approach to green financing can be replicated by the rest of the world.
China is where it's at in green finance in 2016. Its brand new domestic green bond market has zoomed to be the world's biggest in no time, and it has become the first country to produce a comprehensive plan for greening all aspects of finance. Mutual investment between China and the West is set to rise, though some have qualms about funding 'clean coal', reports Julian Lewis.
The European Bank for Reconstruction and Development saw strong demand for its return to the public green bond market this week amid calls for regulators to avoid curbing the nascent industry.
Tsinghua University Science Park is planning to print what would be its inaugural dollar-denominated green bond, according to a source close to the matter.
Axis Bank revived Indian green bond issuance this week with the country’s third international deal. Financial institutions are expected to dominate the pipeline for the rest of the year, as the challenge of issuing offshore deters other borrowers, writes Narae Kim.
Zhejiang Geely Holding Group successfully priced its first international green bond on Thursday, keeping the momentum going for the asset class in China. The issuer opted for a standby letter of credit from Bank of China’s London branch in a bid to attract investors and cut its funding costs.
The future looks bright for China’s domestic bond market having started the year in full throttle with Shanghai Pudong Development Bank (SPDB) and Industrial Bank raising a combined Rmb30bn ($4.6bn). But while the volumes may be impressive, making sure issuers honour the green label will be the real test.
The green bond wave is set to rise higher in 2016, but as before, most of the deals will not help the environment much. One bond that did was sold in the closing days of 2015 — but such deals are still bought only by a small fraction of investors.
From Our Global Coverage
Shareholders and bondholders should pressurise banks to clean up their acts on climate change, sustainable finance experts said this week.
Want full access to GlobalCapital?
If you are new to GlobalCapital or you already subscribe to some of our channels you can still easily extend your access.
Take a trial to the entire site or subscribe online to see all our capital markets news, opinion and data sets.
Don't miss out!Free trial
Best Brands in Finance Poll
Voting has opened for the Asiamoney
Best Brands in Finance Poll.
Read the magazine on your mobile device
Panda Bonds Top Arrangers
|Rank||Arranger||Share % by Volume|
|1||Bank of China (BOC)||18.01|
|3||Agricultural Bank of China (ABC)||10.59|
|5||Industrial and Commercial Bank of China (ICBC)||6.36|
Bookrunners of Asia-Pac (ex-Japan) ECM
|Rank||Lead Manager||Amount $m||No of issues||Share %|
|1||China International Capital Corp Ltd||3,764.17||7||11.54%|
|3||Haitong Securities Ltd||2,766.73||16||8.48%|
|5||China Securities Co Ltd||2,120.55||13||6.50%|
Bookrunners of Asia Pacific (ex-Japan) G3 DCM
|Rank||Lead Manager||Amount $m||No of issues||Share %|
|5||Bank of America Merrill Lynch||3,028.46||14||5.37%|
Asian polls & awards
GlobalCapital Asia held a New Year drinks and awards reception at Le Bistro Winebeast in Hong Kong on February 15, 2017. Below is a selection of the best photos from the night. Our thanks to all who attended.
GlobalCapital Asia and Asiamoney are pleased to announce the results of our Best Country Deals, recognising the standout transactions in Asia. Our thanks to everybody who took time to pitch.
GlobalCapital Asia and Asiamoney are pleased to announce the results of our annual awards, recognising the best banks and transactions in China. Thanks to everyone who took time to pitch and our congratulations to the winners.
GlobalCapital Asia and Asiamoney are pleased to announce the results of our annual awards, recognising the best banks and transactions in Australia. Our thanks to everybody who took time to pitch.
Asiamoney is delighted to announce the launch of the Asiamoney Best Brands in Finance Poll. We want to hear what you, our readers, think makes a top brand among financial market participants in Asia-Pacific — and which companies have the very strongest brands in the markets you know best.