France has followed up its hosting of the landmark COP21 climate summit just over a year ago with the start of a roadshow for a sovereign green bond this week, with a view to issuing a benchmark-sized deal in coming weeks.
In the latest sign that countries are picking up the baton of climate finance, Credit Agricole and Morgan Stanley will begin formal calls and meetings with investors on Friday, to discuss the green bond framework, as well as acting as joint lead managers alongside BNP Paribas, Natixis and Societe Generale.
Credit Agricole will also be sole structuring advisor on the deal. The official issuer will be the Republic of France – which has a rating of Aa2 by Moody’s and AA by S&P – and the euro-denominated notes are expected to have maturities of between 15 and 20 years. Last month, Michel Sapin, France’s Minster for the Economy and Finance, approved state finance plans for 2017, including confirmation that a green bond would be part of the fundraising programme.No further details were given. The move comes just weeks after Poland took the green bond market by surprise with its sovereign green bond – the first in the world.
There has been much anticipation around the development of a sovereign green bond market, and it is seen as one way to help scale up offerings in a market which has seen demand outstrip supply. They are also seen by many as a good way for investors to help governments finance their commitments under the Paris Agreement.
Other countries looking at issuing sovereign green bonds include Sweden, Bangladesh and Nigeria, while Italy, China and Denmark have also been rumoured to be looking at the market.
In France, regional government Ile-de-France has been a long-standing leader in the green bond market, issuing a series of large deals which have been highly praised for their in-depth impact reporting and transparency.