Global green bonds volume reached another peak during the three months ended September 30, says Moody’s Investors Services in a a report published on Monday, with the strongest quarterly issuance yet of US$26.1 billion, while the amount for all of 2016 could rise to over US$80 billion.
“The volume for the third quarter pushed green bond issuance for the first nine months of the year to $63.2 billion, an increase of 132% from the $27.2 billion issued a year ago,” says Henry Shilling, senior vice president at Moody’s, in a news release. “Moreover, volume for the first nine months also strongly eclipsed the total of $42.4 billion issued during all of 2015, which was previously the record for annual green bond issuance.”
Moody’s says that the continued growth in green bond issuance indicates “an acceleration in the momentum of a trend to acknowledge and address climate change that is also echoed in the speed with which the Paris Agreement on climate change went into force.”
“Should the issuance levels seen in the third quarter be sustained through the end of the year, which is likely, given early issuance indicators during the first three weeks of the fourth quarter, the global market stands ready to achieve well over US$80 billion in issuance and may approach US$100 billion for the year,” says Shilling.
Renewable energy and energy efficiency remain the most popular sorts of projects for green bond issuers, the Moody’s report notes, but clean transportation, waste management, and clean water gained ground in the third quarter.
During the third quarter, the number of issuers and transactions declined slightly, while the average transaction size increased, the Moody’s report says. Fifty distinct issuers came to market during the quarter, with 77 transactions, down slightly from the second quarter’s 54 issuers and 81 transactions. The average transaction size increased to approximately US$337 million per transaction. All of these issues were rated investment-grade, the Moody’s report says.