Green Bond Round-up, February 14: Italy plans green bond development committee

Europe

The Italian government has recommended the creation of a national ‘green bond development committee’ as part of a series of proposals put forward in a new report created by the country’s Ministry of Environment and the Protection of Land & Sea and UN Environment (formerly known as the UN Environment Programme). The report, Financing the Future: Report of the Italian National Dialogue on Sustainable Finance, lays out 18 options to help “align its financial system with sustainable development” and “help to identify new growth areas, new ways of ensuring the soundness of financial institutions and new ways to serve clients at home and abroad”. One recommendation is the formation of “a green bond development committee including public and private entities could be formed to identify and deliver the critical steps needed to develop the market, particularly the provision of access for small issuers and savings opportunities for retail investors”.

SEB issued a €500m green bond, following its roadshow last week. The five-year, no grow deal attracted €2.1bn of orders, and was sold to investors from Germany & Austria (26%), Benelux (20%), the Nordics (19%), France (19%), UK/Ireland (10%) and Switzerland (3%). 45% of buyers were asset managers, while pension funds, insurance funds and banks took the remaining notes. From initial pricing thoughts of mid-swaps plus mid-high 20s, the deal priced at 20 basis points above – making it the tightest achieved by a bank with a senior, unsecured benchmark offering since the financial crisis, according to SEB.

Solactive has launched its second green bond index, this time with Lyxor Asset Management UK and the Climate Bonds Initiative. The Solactive Green Bond USD IG Index only includes investment grade green bonds denominated in euros and US dollars, which are above $300m/€300m. It uses CBI’s definition of green bonds, and is licensed to Lyxor.h6. Australia

Flexigroup priced A$50m (€36.2m) of green notes today, in its second asset-backed security deal, as part of a wider fundraising drive. The five-year transaction closed “well oversubscribed”, according to one banker, and pricing was three basis points tighter than a comparable conventional tranche. Proceeds will be used to finance rooftop solar in Australia. DNV GL verified the deal against Climate Bond Initiative Standards. Commonwealth Bank of Australia was the arranger, and National Australia Bank was joint lead manager. More transactions are expected out of Australia over the next fortnight, as the market in the country begins to pick up, according to insiders.

Asia

In Japan, Meiji Yasuda Life Insurance has bought some ¥5.6m (€46.5m) of green bonds from Westpac, the Australian bank, in a private placement. The green bond was certified by the Climate Bonds Initiative and follows Westpac’s inaugural transaction last May. The yield on the latest bond is 3.2% and the maturity is 10 years.

North America

New York’s Metropolitan Transit Authority is in the process of selling $350m of green notes to refinance existing bonds. The bonds are certified by the Climate Bonds Initiative, and Bank of America Merrill Lynch is the lead manager. They are aimed at retail investors, following the success of MTA’s debut green deal last year, which was upsized to $782m, from $500m.