Issuers brought $47.2 billion of green bonds to the global market in the first quarter, a 40 per cent increase year-on-year, according to a new report, and placing the sector in line to hit Moody’s Investors Service’s full-year forecast issuance of $200 billion.
Moody’s report noted that corporates were strong contributors to overall issuance in the quarter, with $15.9 billion in non-financial corporate green bonds and $8.1 billion in financial corporate green bonds.
European issuers accounted for around half of the green bond issuance during the period.
“Q1 of 2019 trails only the fourth quarters of 2017 and 2018 for the highest quarterly issuance ever,” Matt Kuchtyak, analyst at Moody’s, said.
“Green bonds accounted for 2.5 per cent of total first-quarter global bond issuance, and we expect their share of overall debt markets to continue to grow over time.”
According to Moody’s, diversification of proceeds will continue as a growing variety of issuers participate in green bonds.
In the first quarter, energy and building-related projects led with a combined 54 per cent of issuance, but transportation green bonds were said to also show a significant increase compared to previous quarters.
Moody’s believes investor demand for social and sustainability bonds continues to grow, and will support the expansion in these markets over the long run.
The EU’s sustainable finance taxonomy currently under development will ultimately impact the market, the bond credit rating business said, to the extent to which it addresses investor concerns around “greenwashing”.
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