Leading RI investors back new World Bank $550m green bond issue

Seventeen of the world’s leading responsible investment institutions have backed a new World Bank green bond issue worth $550m (€414m).

They include Swedish state funds Andra AP-fonden (AP2) and Tredje AP-fonden (AP3), Blackrock, the California State Treasurer’s Office, the California State Teachers Retirement System (CalSTRS), Deutsche Asset and Wealth Management, Everence, Nikko Asset Management, SEB Wealth, State Street Global Advisors, TIAA–CREF and Trillium Asset Management. The lead order for the transaction came from the California State Treasurer’s Office.

Forty-four percent of the bonds were placed with asset managers, 35% with pension funds and insurance companies, 19% with official institutions, and 2% with corporates. Sixty-one percent went to the US, while 38% went to Europe.

The two-year fixed rate issue was on behalf of the World Bank’s AAA-rated International Bank for Reconstruction and Development (IBRD), which offers loans to middle-income developing countries.

Green Bonds support the bank’s lending to programs addressing the challenges of climate change in the developing world.The World Bank said all the investors “purchased the bonds due to their interest in supporting climate-friendly projects within their investment mandates”.

“A growing group of investors who want to address climate concerns”

Morgan Stanley and SEB are the joint-lead managers for this transaction.

“We are grateful for the support from pioneering investors, banks, issuers and others who are working to help expand this market and work towards a goal that benefits us all,” said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank.

“This transaction is the result of active engagement with a growing group of investors who want to address climate concerns alongside their fiduciary investment duties,” added Hans Beyer, Global Head of Capital Markets at SEB.

The World Bank first issued green bonds in 2008 and has since mobilized more than $4bn equivalent via almost 60 transactions. Link