S&P Sees Corporate Green Bond Market Surging to $30 Bln

(Bloomberg) — The sale of bonds by companies seeking to
finance climate change projects may rise 58 percent to $30
billion this year, Standard & Poor’s said in a report.

Corporate issuances of so-called green bonds that help pay
for environmentally beneficial investments will rise from $19.1
billion raised by companies in 2014, the credit rating company
said on Monday. This may be driven in part by growth in China as
it looks to boost investment in low-carbon energy and cut
pollution.

The entire green bond market reached $36.6 billion in total
last year, and may hit $50 billion or even $100 billion this
year, the report found, citing estimates from the Climate Bonds
Initiative. It’s currently dominated by multilateral banks that
last year represented 44 percent of total issuance. Corporate
issuance accounted for 38 percent.

China entering the market in “full force” would be a
“game-changer” for the green bond market. The nation, which
currently has the world’s third-largest overall bond market, led
investment in renewable energy last year spending $89.5 billion,
according to Bloomberg figures released in January.

While utilities and real estate businesses account for most
corporate green bond raises, companies including Toyota Motor
Corp., Unilever Plc and the Thai oil company Bangchak Petroleum
PCL, all have raised funds through green bonds in the past 18
months, the report said.

Corporate green bonds issued by companies with more than
half their exposure to the clean energy value chain reached a
record of $18.6 billion last year, according to Bloomberg New
Energy Finance.

Of that, the Asia-Pacific region saw the most activity,
issuing $9.7 billion, with China-based companies accounting for
more than a third. The Europe, Middle East and Africa region
issued $3 billion, lower than the $4.7 billion financed in 2013.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Will Wade

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