Chinese Banks Raise $3.5 Billion In Green Bond Issues
The opinion of some that the balance of the global green bonds market is set to shift towards the developing and emerging markets has received a huge boost with two Chinese banks raising billions in fresh issues.
The China Industrial Bank and Shanghai Pudong Development Bank recently raised a total of just over $3.5 billion through two separate green bond issues. The China Industrial Bank raised 10 billion Yuan ($1.52 billion) by offering investors instruments at a coupon rate of 2.95% and maturity of 3 years. Shanghai Pudong Development Bank managed to raise 20 billion Yuan ($3 billion) offering instruments at the same coupon rate and maturity duration.
According to media reports, the green bonds attracted significant interest from the investors as they offered to invest as much as twice the issue size, in case of Shanghai Pudong Development Bank.
These green bond issues seem part of a long trend of similar issues from other Chinese banks. The Chinese central bank announced a quota system for banks and financial institutions to float green bonds and raise up to 300 billion Yuan (over US$45 billion).
The China Industrial Bank and Shanghai Pudong Development Bank have a quota of 50 billion Yuan ($7.6 billion) each.
The green bonds market in China is very young, with the first bonds floated only last year receiving massive response from investors around the world, but is expected at expand rapidly.
Wind energy firm Xinjiang Goldwind Science & Technology received investment interest worth US$1.4 billion for a US$300 million bonds issue. The Agriculture Bank of China issued its first green bonds in London and raised around $1 billion, with the dual currency bonds to be listed on the London Stock Exchange.
With entities in India and China raising over $1 billion each in green bonds issues last year, global credit ratings agency Moody’s stated in a report that these countries may dominate the global labeled green bonds market in 2016.
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