Green Bond Pricing in the Primary Market: January - June 2021

The report analyzes 75 green bonds totaling USD 75.9bn issued in H1 2021, finding that green bonds generally achieved higher book cover and greater spread compression than vanilla equivalents. It highlights a significant increase in allocations to green investors, reaching 66%, and provides evidence of a 'greenium' for 26 out of 33 non-sovereign bonds. Additionally, the report examines sovereign green bond issuance and concludes that green labels can enhance secondary market liquidity, particularly in the EUR utility sector.

• In the first half of 2021, green bonds generally outperformed vanilla equivalents in the primary market, attracting larger book cover and experiencing more significant spread compression on average for both EUR and USD denominations.
• The proportion of green bond allocations to investors with green or responsible investment mandates rose by 18% to reach 66% in H1 2021, the highest level recorded by the publisher.
• Among non-sovereign green bonds where yield curves could be constructed, 79% priced on or inside their yield curve, with 26 out of 33 bonds exhibiting a 'greenium' or pricing on the curve.
• Green bonds showed strong performance in the immediate secondary market; after 28 days, 57% tightened more than comparable vanilla baskets and 70% tightened more than their corresponding indices.
• Sovereign green bond issuance expanded in H1 2021, with four issuers adding six new bonds totaling USD 18.9bn; three of these sovereign issuers with yield curves achieved a greenium.
• An analysis of EUR utility bonds issued in 2019 and observed in 2020 indicates that the green label provided enhanced secondary market liquidity, characterized by more frequent trading and narrower bid/offer spreads.
• Green bond ETFs grew in H1 2021, with total fund assets reaching EUR 1bn (USD 1.2bn) by the end of June, supported by the launch of two new funds.

APA

Harrison, C. (2021). Green Bond Pricing in the Primary Market: January - June 2021. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2021.pdf

Chicago

Harrison, Caroline. Green Bond Pricing in the Primary Market: January - June 2021. Climate Bonds Initiative, 2021. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2021.pdf.

Wikipedia

{{cite report |last1=Harrison |first1=Caroline |title=Green Bond Pricing in the Primary Market: January - June 2021 |publisher=Climate Bonds Initiative |date=September 2021 |url=https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harrison2021green, author = {Harrison, Caroline}, title = {{Green Bond Pricing in the Primary Market: January - June 2021}}, institution = {Climate Bonds Initiative}, year = {2021}, month = sep, url = {https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }