Green Bond Pricing in the Primary Market: April – June 2017

The report analyzes 19 USD and EUR green bonds issued between April and June 2017, finding that while green bonds generally follow vanilla market trends in oversubscription and pricing, EUR corporate green bonds showed superior spread tightening in the immediate secondary market. Approximately 54% of the sampled bonds were allocated to dedicated green investors, with higher concentrations in Developed Markets (62%) than Emerging Markets (25%).

• USD denominated green bonds priced an average of 15.4bps tighter than Initial Price Talk (IPT), which was tighter than the 12.2bps average for vanilla equivalents. In contrast, EUR green bonds priced 6.3bps tighter than IPT, which was less than the vanilla market average of 9.4bps.
• Order book oversubscription for green bonds was largely in line with the vanilla market. EUR green bonds were oversubscribed by an average of 2.3 times (compared to 2.2 times for vanilla), and USD green bonds were oversubscribed 2.8 times, identical to the market average.
• Dedicated green investors were allocated 54% of the bonds in the sample. This allocation varied significantly by market type, with 62% for bonds from Developed Markets and 25% for those from Emerging Markets.
• In the immediate secondary market, EUR corporate green bonds performed particularly well. All five EUR corporate bonds (Nordea, TenneT 2025, TenneT 2029, Intesa Sanpaolo, and 3 Gorges) tightened materially 7 and 28 days post-announcement, with most outperforming their comparison baskets.
• Performance against indices showed that 66% of green bonds tightened more than their corresponding index 7 days after announcement. EUR bonds generally outperformed their indices, whereas results for USD bonds were mixed.
• The existence of a 'greenium' (pricing inside the issuer's own yield curve) was inconsistent. In a sub-sample of 10 bonds, only two (Berlin Hyp and Nordea Bank) exhibited a greenium, while six exhibited a traditional new issue premium.

APA

Harrison, C., & Boulle, B. (2017). Green Bond Pricing in the Primary Market: April – June 2017. Climate Bonds Initiative. https://www.climatebonds.net/files/drupal-files/files/CBI-Green-Bond-Pricing-Q2-2017.pdf

Chicago

Harrison, Caroline, and Bridget Boulle. Green Bond Pricing in the Primary Market: April – June 2017. Climate Bonds Initiative, 2017. https://www.climatebonds.net/files/drupal-files/files/CBI-Green-Bond-Pricing-Q2-2017.pdf.

Wikipedia

{{cite report |last1=Harrison |first1=Caroline |last2=Boulle |first2=Bridget |title=Green Bond Pricing in the Primary Market: April – June 2017 |publisher=Climate Bonds Initiative |date=November 2017 |url=https://www.climatebonds.net/files/drupal-files/files/CBI-Green-Bond-Pricing-Q2-2017.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harrison2017green, author = {Harrison, Caroline and Boulle, Bridget}, title = {{Green Bond Pricing in the Primary Market: April – June 2017}}, institution = {Climate Bonds Initiative}, year = {2017}, month = nov, url = {https://www.climatebonds.net/files/drupal-files/files/CBI-Green-Bond-Pricing-Q2-2017.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }