USD 84.6 bn of green bonds in 2017, SEB Research

29 Aug USD 84.6 bn of green bonds in 2017, SEB Research

On 29 August, SEB released its latest Green Bond Research Report  summarising year to date development in the Green Bond space. The green bond market continues to grow rapidly, with USD 84.6 bn of issuance YTD, standing 53% higher than 2016 volumes Year-over-Year (YoY).
According to the report. It was a prodigious first half of the year for the market, followed by a summer that may appear more relaxing from the statistics, but was actually very busy. Momentum from consecutive record-breaking quarters of USD 32.6 bn issued in 1Q (which was 94% higher YoY) and USD 36.3 bn in 2Q17 (78% higher YoY) did not, however, carry through the rest of the summer.
Total cumulative green bond issuance broke through the USD 300 bn mark, rising to USD 309 bn, with the total number of individual green bond issuers approaching 500. Further, according to the research report, the market continues to diversify and broaden across geographies and sectors with 36 different jurisdictions active this year so far. A cluster of major hot spots has emerged, with the United States shooting to the top of the ranking (USD 22.2 bn of issuance), leaping over the previous market leader France (USD 14.8 bn), followed closely by China (USD 14.1 bn).
According to the research, drivers of this activity and geographic dispersion can be attributed to heightened green infrastructure investment demand (and green bond financing) that is underpinned by an increasingly broad complement and confluence of enablers including economic, technological, security, policy, social and green bond-specific forces, alongside increasing appetite from institutional investors.
According to the report, securitizations (ABS & MBS) have surged by 503% YoY, to USD 14.5 bn, most importantly from U.S.-based issuer Fannie Mae.
The corporate green bond sector surged from earlier in the year, up 83% YoY, driven by a 179% rise in corporate non-financial issuance, standing at USD 20.5 bn. The corporate financial sector, which had lagged 2016 issuance, caught up by mid-June, and was up 22% YoY with USD 14 bn.
The report is available here.