Green bond round-up: China’s Industrial Bank, BRICs bank, Victoria

The Industrial Bank of China has been approved to issue a further CNY20 billion ($3 billion) of green bonds, as China continues to dominate the market in 2016.

The bank, which issued CNY10 billion of green bonds in February, has received permission from the China Banking Regulatory Commission and the People’s Bank of China to launch more by the end of this year.

According to a statement, the bonds with have a tenor of three years and a 3.2% coupon.

China only entered the green bond market last year, but has stormed into the lead regarding the size of the country’s issuance. Earlier this month, the Bank of China sold the world’s biggest green bond, equivalent to more than $3 billion.

The New Development Bank, which is run by Brazil, Russia, India and China, has also completed its RMB3 billion green bond, with a coupon of 3.07% and a five-year tenor. The deal was more than three-times oversubscribed, with over 30 investors placing orders.

It was NDB’s first ever transaction in the capital markets, and the first time an international green bond issuer placed a bond through the China Interbank market.

“Multilateral development banks like the NDB raise the bulk of their resources for lending by issuing bonds on the capital markets.We are therefore extremely delighted with the response from investors on our inaugural bond issue, given that we had no historical track record,” said K.V. Kamath, the bank’s president.

Proceeds from the transaction will be used to finance green infrastructure and “sustainable development projects” in line with China’s national rules on green bonds. Further green bonds from NDB are expected to issued in other BRICs currencies.

Elsewhere, in Australia, the State of Victoria became the first governmental body in the country to tap the green bond market, with a A$300 million, five-year transaction at 1.75%. The issuer, and its bookrunner National Australia Bank, targeted investors with green or SRI mandates at roadshow, resulting in 88% of the notes being bought by ESG investors.

The book was “significantly” oversubscribed, according to NAB, which leaves Victoria likely to return to market. The final allocation went to 17 investors – 87% in Australia, and the remaining buyers out of Europe.

Some 60% of investors were fund managers, followed by banks (27%), insurance companies (10%) and government bodies (3%).

The green bond is the first ever public body to be certified under the Climate Bond Initiative’s standards. Proceeds will be used to support low-carbon real estate, renewables, public transport and energy efficient water treatment projects in the state.