GREEN BOND PRICING IN THE PRIMARY MARKET

The report analyzes 93 green bonds totaling USD 93.3bn issued in H1 2022. It finds that green bonds generally outperformed vanilla equivalents in terms of book cover and spread compression in both EUR and USD markets. While 20% of the non-sovereign sample achieved a 'greenium' (pricing inside their own yield curve), the report notes that investors were more cautious due to geopolitical and macroeconomic volatility. Additionally, the analysis indicates that green bonds aligned with the Climate Bonds Database maintain better liquidity in the secondary market compared to vanilla and non-aligned green bonds, particularly in the real estate and utility sectors.

• Green bonds in both EUR and USD markets generally achieved higher oversubscription (book cover) and greater spread compression than their vanilla equivalents during H1 2022.
• In the EUR market, green bonds had an average oversubscription of 3.1 times and spread compression of 18.2bps, compared to 2.4 times and 16.4bps for vanilla bonds. In the USD market, green bonds averaged 3.8 times oversubscription and 29.3bps spread compression, versus 2.7 times and 22.5bps for vanilla equivalents.
• Approximately 65% of green bonds were allocated to investors who identified as having green or responsible investment mandates.
• A 'greenium'—where a bond prices inside its own yield curve—was achieved by 10 out of 50 non-sovereign green bonds for which yield curves could be constructed.
• Green bonds demonstrated better secondary market liquidity than vanilla equivalents in the real estate and utility sectors, characterized by higher turnover and narrower bid/offer spreads for bonds aligned with the Climate Bonds Database.
• Sustainability-linked bonds (SLBs) showed evidence of a greenium, with 14 out of 37 analyzed SLBs achieving this pricing benefit, though this was more prevalent in USD instruments issued in 2021 than in 2022.
• Sovereign green bond activity in H1 2022 included the debut of Austria's first green bond (EUR 4bn) and France's first inflation-linked green bond (EUR 4bn).
• Total assets in EUR and USD green bond ETFs ended H1 2022 at USD 1.75bn, representing a 3% decline from the previous period.

APA

Harrison, C. (2022). GREEN BOND PRICING IN THE PRIMARY MARKET. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2022.pdf

Chicago

Harrison, Caroline. GREEN BOND PRICING IN THE PRIMARY MARKET. Climate Bonds Initiative, 2022. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2022.pdf.

Wikipedia

{{cite report |last1=Harrison |first1=Caroline |title=GREEN BOND PRICING IN THE PRIMARY MARKET |publisher=Climate Bonds Initiative |date=September 2022 |url=https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harrison2022green, author = {Harrison, Caroline}, title = {{GREEN BOND PRICING IN THE PRIMARY MARKET}}, institution = {Climate Bonds Initiative}, year = {2022}, month = sep, url = {https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H1-2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }