HSBC issues its first green bond, a €500m certified ‘deep green’ issue

The latest environmental move by leading global finance player

Global banking giant HSBC has issued its first ever green bond, a €500m issue certified as ‘dark green’ by Norway-based third-party assurance outfit CICERO, in the latest environmental move by a leading finance player.

The bond was issued by HSBC France and is rated A2/AA-/AA- by Moody’s, S&P and Fitch, the bank said. It comes after rivals Barclays and Credit Agricole have just this week announced major new multi-billion commitments to green bonds amid a raft of announcements by other finance players.

“This is HSBC’s debut green bond, which further demonstrates the bank’s commitment to being at the forefront of sustainable financing globally, while reinforcing HSBC’s position in the green space,” said Group Treasurer Bryan Pascoe.

He added that the “success of this trade” showed the appeal of green bonds beyond the traditional investor base and that “the private sector can play an important role in sustainable finance”.

The proceeds of the bond will be used to fund green lending under the HSBC Green Bond Framework.Proceeds will go towards renewable energy (wind, solar, tidal and biomass), energy efficiency (e.g. chillers, lighting systems), efficient buildings, sustainable waste management (methane capture technology), sustainable land use, clean transportation, sustainable water management and climate change adaptation.
The new bond matures on December 3 2020 and offers a coupon, or interest rate, of 0.625%. HSBC was the sole bookrunner and the joint lead arranger was SEB. The Co-Lead Managers were ABN Amro, BayernLB, BBVA, Citi, Credit Suisse, Natixis, RBC, SMBC, RBS, TD, NAB, Westpac and Intesa. On November 12 the bank – which has a Climate Change Centre of Excellence – committed to a $1bn green bond portfolio, having signed the Montreal Carbon Pledge in September which commits it to measure and disclose the carbon footprint of its clients’ investment portfolios.

Elsewhere, Swedish bank SEB said it would gradually shift away from supporting investments in coal – that it would not go into new business with companies with large business in coal mining.