Market Blog #16: November green bond issuance at USD13.3bn so far: Largest Certified Climate Bond todate: 1st Certified Climate Bond from airport
Highlights:••••

USD13.3bn green bonds in November so far
ING issues USD2.95bn Certified Climate Bond – largest Certified deal to date and largest from aEuropean bank
Royal Schiphol Group NV comes to market with fist Certified Climate Bond for airport terminalbuildings upgrades
Fannie Mae publishes Green MBS and Credit Facility deals for October: USD1.3bn

Don’t miss:•Climate Bonds’ newly launched Forestry Criteria is now available for Certification – details & supporting
documents available here.

•

Climate Bonds has convened a high-level Adaptation and Resilience Expert Group (AREG) to
determine overarching principles for defining climate resilient assets and bonds.

Green bond deals across the globe

2018 Issued

138.1 Bn

USD Bn0100

461 Bn200

300

Go here to see the full list of new and repeat issuers in November.

491 Bn400

500

Total Outsanding
Total Issued

At a glance
As of November 20th, monthly green bond issuance totalled USD13.3bn. Almost 70% of issuance came from financial
corporates, with China Industrial Bank’s CNY30bn (USD4.3bn) green bond accounting for a third of total volumes.

Certified issuance has been plentiful so far in the month, reaching USD5.8bn! ING, a repeat issuer in the green bondmarket, broke the record for largest Certified Climate Bond with its USD2.95bn deal. The other three issuers are New
South Wales Treasury Corporation (USD1.3bn), Industrial Bank Co. - Hong Kong Branch (USD943m) and Royal
Schiphol Group (USD569m).
China dominated country issuance at 40%, followed by the Netherlands (26%) and the US (13%). Other than from
Certified bonds, benchmark size deals came from MünchenerHyp (Germany) and Duke Energy Carolinas LLC (USA).

October update
Fannie Mae’s October Green MBS drove October green bond figures to USD15.2bn, just 6% below 2017’s monthly
volume. Cumulative issuance from January to October stands at USD125.6bn, or slightly (0.2%) higher than 2017
volumes over the same period. There is still time for a sprint during the final months of the year to take annual green
bond issuance to a new record.

Monthly volume by issuer type20

USD Billions

18
16

Loan

14

Sovereign

12

Government-backed entity

10

Local government

8

Development bank6

Non-financial corporate

4

Financial corporate

2

ABS

0
1

2

3

4

5

6

7

8

9

10

11

> The full list of new and repeat issuers here.
> Click on the issuer name to access the new issue deal sheet in the online bond library.

Certified Climate Bonds
Industrial Bank Co., Ltd. - Hong Kong Branch (USD600m; EUR300m/USD343m), China, issued a two-

tranche senior secured Certified Climate Bond. The deal is Certified under the Wind, Solar and Low Carbon
Transport Criteria of the Climate Bonds Standard. The proceeds will be used to refinance loans funding one
solar PV and four wind power generation projects, as well as four urban rail and metro network projects infour different cities. The combined generation capacity of the renewable energy projects is 323 MW.
Sustainalytics provided the Pre-Issuance Verification Report.

ING Bank N.V. (USD1.25 billion; EUR1.5bn/USD1.7bn), Netherlands, issued a two-tranche seniorunsecured Certified Climate Bond – the largest Certified bond to date. The deal is Certified against the
Marine Renewable Energy, Wind, Solar and Low Carbon Building (Commercial and Residential) Criteria of
the Climate Bonds Standard. Proceeds will be earmarked to finance and refinance loans for onshore windfarms, offshore wind farms, solar energy farms, as well as commercial and residential buildings belonging
to the top 10% of low carbon buildings in the Netherlands.
ING is a repeat issuer with two 2015 deals totalling USD1.3bn. In seeking Certification for its latest greenbond, the bank demonstrates its commitment to complying with best-in-class requirements for its
eligibility criteria and transparency practices. This green deal is also the largest from a European bank.
ISS-Oekom issued the Pre-Issuance Verification Report.

New South Wales Treasury Corporation (TCorp) (AUD1.8bn/USD1.3bn) issued a 5-year seniorunsecured Certified Climate Bond - the largest green bond from an Australian issuer to date and the third
Certified bond from an Australian municipality following Treasury Corp Victoria and Queensland Treasury
Corp. The bond is Certified under the Low Carbon Transport and Water Infrastructure Criteria of the
Climate Bonds Standard. Proceeds of the debut deal will be used to finance and refinance the constructionof the Sydney Metro Northwest and Newcastle Light Rail projects, as well as water treatment systems
projects including the Quakers Hill and St Marys Water Recycling Plants Process and Reliability Renewal.
Future deals may also allocate proceeds to other transport-related infrastructure.
EY provided the Pre-Issuance Verification Report.

Royal Schiphol Group NV (EUR500m/USD569m), Netherlands, issued a senior unsecured Certified

Climate Bond, becoming the first airport to issue a Certified green bond. Mexico City Airport and theGreater Orlando Aviation Authority have also issued labelled green bonds to finance theconstruction/upgrades of airport buildings. The majority of the proceeds will be used for the refurbishment
for existing airport buildings and the construction of several new buildings that comply with the Low
Carbon Buildings Criteria. A smaller portion of the proceeds will be used for acquiring new electric vehicles
for passenger transport and for the installation of the related charging infrastructure.
Vigeo Eiris provided the Pre-Issuance Verification Report.

New issuers
California Educational Facilities Authority (USD87m), USA, issued a 30-year US muni green bond tofinance projects within the Loyola Marymount University. Proceeds are allocated to the construction of
approximately 625 new undergraduate housing beds on the Westchester campus. The issuer intends topursue a minimum certification level of LEED Silver for the project. Both project development and in-use
stages have been commissioned with the objective to achieve low-energy and sustainable targets. In
addition, instalment of bicycle facilities and access for green vehicles will facilitate local transportation
around the campus.
Climate Bonds view: This is the second green US muni bond from the education & research sector in 2018.

Dominion Energy Inc (USD362m), USA, issued a debut green private placement. The deal will refinance theacquisition, development and construction of 20 solar projects located in Virginia, North Carolina, South Carolina

and California. The projects became operational between 2016 and 2018 and have a combined capacity of
574MW.
Climate Bonds view: It’s great to see a diversified energy company entering the green bond market torefinance green assets within its portfolio. We hope to see Dominion Energy and its peers becoming repeat
issuers in the market and taking advantage of the green label to finance their brown-to-green transition.
Duke Energy Carolinas LLC (USD1bn), USA, issued a two-tranche senior secured green bond (longest

dated bond: 10 years) – the largest green bond from a US-based utility company. The deal is secured by acontinuing lien on the issuer’s selected properties and franchises. According to the Green Bond Framework
incorporated in the deal’s prospectus supplement, the First and Refunding Mortgage Bonds will financesolar energy projects, including PPA agreements and rebates for rooftop solar installations, as well as
energy storage related to distributed and grid assets and pumped-storage at existing hydro facilities.
Projects are located in North and South Carolina.
Climate Bonds view: This debut benchmark issuance from one of the largest US energy holding companies
provides yet another example of how large utility companies can use the green bond market as a source offinance to expand their exposure to green assets.

Fuyo General Lease Co., Ltd. (JPY10bn/USD88m), Japan, issued a 5-year senior unsecured green bondwhich obtained a Green 1 Green Bond Evaluation from Japan Credit Rating Agency. Deal proceeds will
finance the redemption of commercial paper and the construction of four solar power generating facilities.
The targeted total annual average generation is 98,428 MWh, which is estimated to represent an annual
CO2 reduction of 51,650 tCO2.
Climate Bonds view: Disclosing expected generation and CO2 reduction figures at a pre-issuance stage isencouraged to provide more clarity on the financed assets. The replacement of commercial paper – which
is a debt instrument with a maturity of up to a year – is also favourable as the 5-year bond provides morecertainty of funding for the life of the project: developing the solar assets and bringing them online.

Japan Real Estate Investment Corporation (JPY10bn/USD 89m) issued a 5-year unsecured green bond,benefiting from a Sustainalytics Second Party Opinion. Proceeds will be used to finance and refinancebuildings that have or will obtain the top three levels of green building certification schemes including DBJ
Green Building Certification, BELS and CASBEE. Refurbishments of buildings are also eligible if they meetthe framework requirements, such as achieving a one level improvement of the green building
certification, or a minimum 10% reduction in CO2 emissions, energy consumption or water consumption.
Climate Bonds view: We hope that this deal, together with issuance from Mitsubishi Real Estate and a few
REITs, will encourage more real estate players to come to market. We would, however, prefer to see
issuers implement stricter eligibility criteria for green buildings, namely targeting the highest levels ofgreen building certifications and a minimum of 20%, but preferably over 25%, in energy efficiency
improvements for refurbishments and upgrades.

MünchenerHyp (EUR500m/USD568m), Germany, issued a 5-year mortgage covered bond. Proceeds areallocated to (re)-finance residential and commercial property mortgages. Residential mortgages are eligible
for residential buildings with a maximum annual energy performance of 70kWh/m2 or that have obtained

an energy performance certificate of “B” or above (on a scale of H to A+). For commercial properties,
mortgages are eligible for projects that have obtained one of the following energy certificates: DGNB (min.
Gold or Platinum), BREEAM (min. Very good or Platinum), LEED (min. Gold or Platinum), HQE (min.
Excellent or Exceptional), or 15% of national building stock by energy performance.
Climate Bonds view: This is the fifth covered bond to be issued by a German green bond issuer this year, taking thecountry’s 2018 cumulative total to USD7.5bn.

Schertz-Seguin Local Government Corporation (USD19m), USA, issued a 22-tranche green US Muni

(longest dated bond: 22 years), becoming the first issuer from Texas to come to market with a green bondin 2018. The deal will finance projects related to the development and operation of the water supply
system of the cities of Seguin and Schertz, including the construction of a cross-country pipeline, treatment
facilities, pumping stations, water storage and gathering lines from the well-field.
Climate Bonds view: Water is the largest sector financed by US Muni green bonds, with over half ofproceeds from US municipal deals being allocated to water-related projects in 2018, or USD1.7bn. What isnotable about this deal is that it involves inter-governmental cooperation. The cities of Schertz and Seguin
recognized the interconnectedness of the issues at stake related to their water system and identified acommon solution. We hope to see more US municipal agencies using green bonds as a means to cooperatewith other agencies in obtaining financing for green infrastructure projects.

Småkraft AS (EUR50m/USD5.9m), Norway, issued a 5-year senior secured green bond, which benefits

from a CICERO Second Party Opinion (not publicly available). The deal is secured by 11 hydropower plants
across Norway, with annual production of around 160 GWh. Proceeds will finance small scale hydro power
plants across Norway. According to the issuer, the ceiling of 100g of CO2/kWh for inclusion in the green
bond database has to be seen as very high in the context of Norwegian hydropower. Due to the sparsevegetation in the areas where Norwegian hydropower plants are located, typically in mountainous regions
at higher altitudes, there is little biomaterial that could be the source of emissions.
Climate Bonds view: Issuers are encouraged to make Green Bond Frameworks and external reviews
publicly available to increase transparency.

New issuers – deal issued prior to November 2018
Solis S.r.l. (EUR5.4m/USD6.3m), Italy, issued an 18-year green project bond in June 2018, becoming thefirst Italian green bond issuer to allocate proceeds exclusively to finance a biomass project. The bond willrefinance a biomass combined heat and power (CHP) project located in the Municipality of Settimo
Torinese, Piedmont, Italy. The Project uses virgin wood biomass to generate 22 MWh of electricity and 85
MWh of thermal power per day.
Climate Bonds view: While the deal was not labelled as green in the prospectus, Elaris Holdings’ CEOreferred to it as a green bond in the official press release. Issuers are encouraged to enhance the visibilityof the green label by including it in the prospectus or any other public documents related to the deal to
make it easier for investors to identify the bond.

Repeat issuers
•
•
•
•
•
•
•
•

Advanced Soltech Sweden AB: SEK70m/USD8m
China Industrial Bank: CNY30bn/USD4.3bn
City of Gothenburg: 2 tranches for a total of SEK1.5bn/USD166m
City of Los Angeles: 22 tranches for a total of USD220.5m
Hong Kong & China Gas: HKD600m/USD77m
IFC: GBP150m/USD197m (tap)
ING: EUR1.5bn/USD1.7bn; USD1.25bn (Certified Climate Bond)
Prologis European Logistics Fund: EUR300m/USD339m
Repeat issuers account for 62% of issuance

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

USD Billions

Prologis European Logistics Fund

Advanced Soltech Sweden AB

City of Gothenburg

ING

China Industrial Bank

IFC

City of Los Angeles

Hong Kong & China Gas

New issuers

Pending and excluded bonds
We only include bonds with at least 95% proceeds dedicated to green projects that are aligned with the Climate
Bonds Taxonomy in our green bond database. Though we support the Sustainable Development Goals (SDG) overalland see many links between green bond finance and specific SDGs, the proportion of proceeds allocated to social
goals needs to be no more than 5% for inclusion in our database.

Issuer Name

Amount issued

Issue date

Qilu Bank

CNY3bn/USD433m

05/11/2018

Reason for exclusion/
pending
Not aligned

Bank of Jiujiang

CNY3bn/USD433m

06/11/2018

Not aligned

BNG Bank

EUR500m/USD568m

08/11/2018

Sustainability/Social bondPingmei Coal

CNY970m/USD139.9m

08/11/2023

Not aligned

Xinhua Hydropower

CNY1bn/USD143.7m

09/11/2018

Working capital

NWB Bank

EUR600m/USD673

12/11/2018

Sustainability/Social bond

University Properties of Finland

EUR100m/USD113.9m

02/11/2018

Pending

Bank of Chongqing

CNY3bn/USD431.2m

09/11/2018

PendingYancheng City Haixing
Investment
LG Display

CNY100m/USD14.4m

09/11/2018

Pending

USD300m

15/11/2018

Pending

Orebro Kommun

SEK500m/USD55m

20/11/2018

Pending

World Bank (IBRD)

EUR600m/ USD682.2m

20/11/2018

Pending

World Bank (IBRD)

USD600m

20/11/2018

Pending

Green bonds in the market
•
•
•
•
•
•
•

Flemish Community: EUR500m – closing November 21
Al Omrane: MAD500m - closing November 23
TransLink: CAD400m – closing November 23
Agricultural Development Bank: EUR500m – closing November 26
Boston Properties: USD1bn - closing November 28
Kilroy Realty LP: USD400m - closing November 29
City of Bloomington – closing December 5

Investing News
Deutsche Börse has launched a new segment for green bonds on the Frankfurt Stock Exchange. It currently
includes about 150 bonds that comply with the Green Bond Principles.
BlackRock launched its first green bond exchange traded fund, iShares Global Green Bond ETF. The ETF will track theBloomberg MSCI Global Green Bond Index.
UBS Global Wealth Management has contributed to the development of Align17, a new platform that facilitates highnetwork individuals and family offices to make investments that generate social and environmental benefits inalignment with the UN Sustainable Development Goals.

Green Bond Gossip
Pepper Group, a mortgage and consumer lender and loan servicer, published a Green Bond Framework.
Sustainalytics provided the Second Party Opinion.
Stockholm-based private investment firm Baseload Capital obtained a Sustainalytics Second Party Opinion on its
Green Bond Framework.
French postal services group Le Poste developed a Green Bond Framework, which benefits from a Sustainalytics
Second Party Opinion.
DNV GL provided the Second Party Opinion for Snam SpA’s Green Bond Framework.
Japanese construction company Toda Corp developed a new green bond framework which obtained a Sustainalytics
Second Party Opinion.
Renewable Japan Co., Ltd. obtained a GA1 Green Bond Assessment from R&I for its JPY8.9m green bond scheduled
to come to market in January 2019.
Ence Energia obtained an E1/79 Green Evaluation from S&P Global Ratings for its proposed EUR69.4m green debt
facility.
Invesco Office J-REIT published a Green Bond Framework, which benefits from a Sustainalytics Second Party Opinion.

New World China Land has hired bookrunners and obtained a "pre-issuance stage certificate" under the Hong Kong
Quality Assurance Agency's green finance certification scheme for a 5-year bond under its USD2bn MTN programme.

Reading and Reports
The International Energy Agency (IEA) recently published its World Energy Outlook 2018 flagship report.

Moody’s launched a report focusing on green ABS: Structured finance - Global: Green finance sprouts
across structured finance sectors
Climate Bonds Reports
The State of the Market 2018 Portuguese Edition: TÍTULOS DE DÍVIDA E MUDANÇAS CLIMÁTICAS ANÁLISE DO
MERCADO 2018
Can green bonds finance Brazil’s agriculture? Available in English and Portuguese.

Moving Pictures
Watch how Boston is implementing a new long-term solution to combat flooding.
Learn how a Colombian archipelago is farming corals to repair damaged reefs.

‘Till next time,
Climate Bonds

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate
Bonds Initiative is not an investment adviser. Any reference to a financial organisation or debt instrument or investment productis for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative
accepts no responsibility for content on external websites.
The Climate Bonds Initiative is not endorsing, recommending or advising on the financial merits or otherwise of any debt
instrument or investment product and no information within this communication should be taken as such, nor should any
information in this communication be relied upon in making any investment decision.
Certification under the Climate Bond Standard only reflects the climate attributes of the use of proceeds of a designated debt
instrument. It does not reflect the credit worthiness of the designated debt instrument, nor its compliance with national orinternational laws.
A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an
individual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, basedin whole or in part on any information contained within this, or any other Climate Bonds Initiative public communication.