GREEN BOND PRICING IN THE PRIMARY MARKET: July - December 2019

The report analyzes 49 green bonds totaling USD36bn issued in H2 2019. It finds that green bonds generally outperformed vanilla equivalents in terms of book cover and spread compression. Approximately 50% of these bonds were allocated to investors identifying as green. The analysis also highlights a 'greenium' (pricing inside the yield curve) for several bonds and examines the growing market for sovereign green bonds, where 12 governments had issued such instruments by December 2019.

• Green bonds in both EUR and USD denominations generally achieved higher oversubscription (book cover) and greater spread compression during the pricing process than their vanilla equivalents. In EUR, average oversubscription for green bonds was 2.8x compared to 2.0x for vanilla bonds, while in USD, it was 2.7x versus 1.9x.
• Half of the funds raised from the sampled green bonds were allocated to investors who described themselves as green or socially responsible, representing approximately USD10bn.
• A 'greenium'—where a bond prices inside its own yield curve—was observed in 7 out of 19 bonds for which yield curves could be constructed. These included Municipality Fin. 2029, EDP Finance 2026, Generali 2030 (SSUB), and CAFFIL 2029 (CO) in EUR, and EIB 2029, MidAmerican Energy 2050, and Duke 2029 in USD.
• Green bonds showed stronger performance in the immediate secondary market than vanilla baskets and indices. Seven days after pricing, 60% of green bonds tightened more than comparable vanilla baskets and 57% tightened more than their corresponding index. After 28 days, these figures were 56% and 58% respectively.
• As of December 2019, 12 governments had issued 19 sovereign green bonds totaling USD53.7bn. The French green OAT (GrOAT) is the largest single sovereign green bond, reaching EUR23.3bn by the end of 2019.
• Sovereign green bonds demonstrated strong pricing performance, with 10 out of 11 bonds in the sample achieving larger spread compression than their comparable baskets.
• The number of green bond ETF products grew to six by the end of 2019. The Lyxor Green Bond DR UCITS ETF, launched in February 2017, grew to be 33 times larger than its launch size by December 2019.

APA

Harrison, C. (2020). GREEN BOND PRICING IN THE PRIMARY MARKET: July - December 2019. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H2-Q3-Q4-2019.pdf

Chicago

Harrison, Caroline. GREEN BOND PRICING IN THE PRIMARY MARKET: July - December 2019. Climate Bonds Initiative, 2020. https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H2-Q3-Q4-2019.pdf.

Wikipedia

{{cite report |last1=Harrison |first1=Caroline |title=GREEN BOND PRICING IN THE PRIMARY MARKET: July - December 2019 |publisher=Climate Bonds Initiative |date=March 2020 |url=https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H2-Q3-Q4-2019.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{harrison2020green, author = {Harrison, Caroline}, title = {{GREEN BOND PRICING IN THE PRIMARY MARKET: July - December 2019}}, institution = {Climate Bonds Initiative}, year = {2020}, month = mar, url = {https://www.climatebonds.net/files/documents/publications/Green-Bond-Pricing-in-the-Primary-Market-H2-Q3-Q4-2019.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }