Sustainable debt issuance increased 25% in the third quarter

Global green, social, sustainable and linked to sustainability (GSSS) bond issuance totaled $ 217 billion in the third quarter of this year.

This figure is 25% higher than that issued in the same period of 2020, but 21% lower than the 273,000 million dollars placed in the second quarter of this year.

A study on the global situation of GSSS bonds, prepared by the risk rating agency Moody’s ESG Solutions, highlighted that between July and September 2021, 115,000 million dollars were placed in green debt, 29,000 million in social bonds, 52,000 million in bonds of sustainability and 21,000 million in papers related to sustainability.

Between January and September 2021, the figure adding the four items was 775,000 million dollars, almost double the 402,000 million dollars issued in the first three quarters of 2020.

The firm expects that by the end of 2021 the GSSS bond placement figure of 1 trillion dollars will be exceeded.

Green bond issuance was important in the third quarter of the year reaching 115,000 million dollars, 14% less than the record of 133,000 million dollars in the second quarter of the year, but 18% more than in the third quarter of 2020.

The $ 380 billion of green debt in the first three quarters of the year was 75% more than that issued in the same period of 2020, when the coronavirus pandemic caused a slowdown in the economy and contributed to the reduction of bond issuance. green.

According to Moody’s, given the increase in interest for financing green bonds, the placement of these papers could exceed 500,000 million dollars this year.

US at the head

The leading countries in the issuance of green bonds between January and September of this year were the United States with 61,000 million dollars (16% of the world total), Germany with 46,000 million (12%), China with 45,000 million (12%) and France with 32,000 million dollars (8%).

Regarding regions, Europe dominated the scene with 65,000 million dollars, which represents 57% of the global emission. In second place was North America (22% of the total) and in third place, the Asia-Pacific region (19% of total emissions).

By sectors, non-financial companies were leaders in the issuance of green bonds in the third quarter, with 48,000 million dollars, that is, 42% of the total worldwide, a figure below 51% in the second quarter.

The second most active sector was sovereign issuers that disbursed $ 25 billion or 22% of the total.

Between January and September, non-financial organizations issued $ 170 billion in green debt, 45% of the world total. The two largest non-financial sector transactions in the third quarter included a € 2 billion deal from Mondelez International, and a $ 2 billion deal from Walmart, both in September.

Downward social bonds

The placement of social bonds fell in the third quarter as the largest issuers brought lower volumes to the market. The issuance totaled 29,000 million dollars, 47% less than the second quarter of the year and 7% less than the 31,000 million of the third quarter of 2020.

The decrease in issuance was due to lower volumes from the three largest issuers on the market: the European Union (EU) and the French public finance agencies Caisse d’Amortissement de la Dette Sociale (CADES) and UNEDIC, whose combined placement was of only $ 8 billion, as the EU did not issue any social issues.

The issuance of social bonds totaled $ 173 billion between January and September of this year, dwarfing the $ 167 billion that were issued throughout last year. Moody’s ESG Solutions estimates that the issuance of these bonds may exceed $ 200 billion by the end of 2021.

Banobras would place a gender bond in 2022

The National Bank of Public Works and Services (Banobras), the country’s infrastructure bank, would launch a gender bond on the market next year, said Jorge Mendoza Sánchez.

The general director of the development institution explained that the project is in its early stages, since the bank’s projects that can be accredited to be considered gender-based are being explored.

We hope to be able to do it next year, we do not currently have details, we have to see who certifies us in the gender bond and who helps us implement a gender equity strategy and set a reference for other banks and for the country, “he said. .

Banobras, he added, it is clear that now there are more institutional investors with a conscience on green, environmental, social and gender issues and they are even often more aggressive in their positions.

Mendoza Sánchez explained that with the participation of this type of investors there is a more complete purchase position book.

The public official stressed that it cannot be determined if the cost of financing in these papers falls, since there are external as well as internal variables, among other things. However with them there is more “appetite” to analyze and show more interest in these types of roles.

Jorge Mendoza explained that Banobras has 10 green bond issues for more than 30.5 billion pesos, which has become the most important issuer in this area in Mexico and Latin America. In fact, Banobras is accredited by the Green Climate Fund, the framework established as a mechanism to support countries in adapting mechanisms to improve and combat climate change. In October, it issued four sustainable bonds on the Mexican Stock Exchange.

(With information from Eduardo Huerta)

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Reference-www.eleconomista.com.mx

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