The global green bonds market has set a new financial record, Moody’s has revealed, with issuance during the third quarter of 2017 reaching a higher, total value than ever before.
Meanwhile, issuance in the segment throughout the first nine months of the year eclipsed that recorded for the whole of 2016.
According to the rating agency’s figures, 83 individual issuers brought 111 transactions to market in Q3. Those numbers were slightly lower than in Q2, when a record 85 entities delivered 116 transactions.
However, when the total value of those transactions is considered, the picture changes.
As Moody’s analyst, Matthew Kuchtyak, announced: “Global green bond issuance totalled $32.7bn in the third quarter of 2017 – just topping $32.2bn of issuance in the second quarter, and setting a new quarterly issuance record for the decade-old market.
“Total green bond volumes for the first nine months of the year hit $94.5bn – a 49% increase over the $63.2bn of issuance during the first nine months of 2016.”
Moody’s pointed out that non-financial corporate green bond issuance regained the top spot in the third quarter, after relinquishing its crown in the second.
Corporates accounted for a strong $18bn of issuance during the quarter – some 55% of the market – with 93% of those deals investment-grade rated.
Kuchtyak added: “We continue to observe marginal increases in speculative-grade issuance, though this remains a small portion of the total green bond market.
“Following 5% of rated issuance in the first quarter and 6.4% of rated issuance in the second, speculative-grade green bonds represented 7.2% in the third.”
Moody’s noted that 6.1% of green bond issuance in the first three quarters of this year was speculative grade, compared to 1.4% across the whole of 2016.
“Continuation of this trend would mark a further maturation of the green bond market globally,” the rating agency said, “as issuers with a wider range of credit quality would be participating in the market.”
Another signal of maturation, it said, “is a growing number of emerging-market green bond issuance. Though this component of the market has experienced a slowdown in new deals during the first nine months of the year, new transactions continue to post fresh highs.”
Average transaction size in the market also received a healthy boost – jumping from $278m in Q2 to $295m in Q3.