SBMC Becomes First Private Company To Issue Green Bonds In Japan
Sumitomo Mitsui Banking Corporation recently became the first private sector entity in Japan to issue green bonds, and only the second originating from Japan.
Sumitomo Mitsui Banking Corporation (SMBC) announced that it raised $500 million through dollar-denominated green bonds, with the proceeds from the bond issue to be used to finance new and existing projects based on renewable energy and energy efficiency technology.
The company also stated that it may swap a portion of the dollar-denominated proceeds to yen, seeing as, since last October, the Japanese Yen has strengthened by over 10% against the US Dollar. The coupon rate for the bonds have been set at 2.45%, and the Bank of America, Merrill Lynch, and SMBC Nikko Securities America were the joint bookrunners for the issue.
In September last year, the Development Bank of Japan issued the country’s first green bond. The bonds issue was Euro-denominated and raised €250 million.
Of late, several entities have issued green bonds as these financial instruments have become very popular way of raising funds among private companies, as well as government institutions. According to the Climate Bonds Initiative, till mid-October this year, nearly 30 billion worth of green bonds had been issued, while in 2014, green bonds worth $36.6 billion were issued.
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