Asia-Pacific raises record-high volume of green bonds in first half
Europe leads world with a 55.2% share of green issuance, while Asia-Pacific raises US$21.9 billion, with China accounting for US$8.3 billion, in the first half of 2019
The Asia-Pacific region, including Japan, raised a record US$21.9 billion worth of green bonds in the first half of 2019, an increase of 29.6% from a year ago and representing a market share of 25.4% during the period.
According to figures released by Refinitiv on July 11, the issuances were led by China - which emerged as a key issuer since 2016 – with US$8.3 billion, though this volume showed a 4% decline from the previous year. The Industrial and Commercial Bank of China (ICBC) was the most active Chinese green bond issuer as it raised an aggregate of US$2.2 billion from three offerings during the first half of 2019. Bank of Jiangsu, on the other hand, raised US$1.49 billion.
South Korea saw a 467.5% surge to US$3.9 billion in green bond transactions during January-June this year, while Japan, which started to pick up issuance in 2018, registered a 72.9% growth in volume to US$2.2 billion during the same period. Southeast Asia also gained momentum and recorded US$3.3 billion worth of proceeds in the first half for a 36.1% growth rate, while Hong Kong priced in May this year its inaugural green bond offering amounting to US$1 billion. South Korean petrochemical company LG Chemical was the second-largest green bond issuer out of the Asia-Pacific in the first half with two issuances totaling US$1.56 billion.
Overall, the total global green bond issuance amounted to US$86.4 billion in the first half of 2019 – a 26.2% increase from a year earlier as the number of issues rose by 14.9%. This follows a record-high US$132.3 billion in annual proceeds in 2018 as the interest in responsible investment continued to grow. On the other hand, the total proceeds from the global ESG bond deals rose faster at 36.5% to US$110.1 billion during the same first-half period.
Europe was the largest regional green bond market with a 55.2% market share, raising US$47.7 billion in the first half of 2019. By country, France accounted for a 13.4% market share with a volume of US$11.6 billion, while Germany had an 8.1% market share with the state-owned development bank KfW Bankengruppe raising US$3.4 billion.
The Americas raised US$16 billion in green bond proceeds during the six-month period, up 63.3% from a year ago. The US captured an 11.3% market share globally with proceeds amounting to US$9.7 billion, and followed behind France as the most active issuer country this year. Chile launched its first sovereign green bond in June amounting to US$1.4 billion.
Refinitiv notes that as the growth in the green bond market continues unabated, the types of issuers have become increasingly diverse as well. Aside from government and financial institutions, corporate borrowers such as Apple, Starbucks and Verizon Communications – and from various sectors such as technology, retail and telecommunications – have continued to emerge since 2016.
In terms of deal arrangers, HSBC emerged as the leading global bookrunner for green bond issues with a total volume of US$5.69 billion, followed closely by Credit Agricole CIB with US$5.46 billion. Bank of America Merrill Lynch was in third spot with a volume of US$4.70 billion, followed by BNP Paribas with US$4.66 billion and J.P. Morgan with US$4.01 billion.
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