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Green Bonds on London Stock Exchange Page 1
Green Bonds on London
Stock Exchange
Page 1
• Green bonds are any type of bond instrument where the proceeds will be exclusively applied to finance or re-finance in part or in full
new and/or existing eligible ‘green’ projects.
• The key feature of green bonds is the use of proceeds, which are described in the bond’s legal documentation, separately managed
within the company, as well as monitored and reported throughout the life of the instrument.
• Categories of potential eligible green projects include:
renewable energy
energy efficiency
sustainable waste management
sustainable land use
biodiversity conservation
clean transportation
climate change adaption, etc.
What is a Green Bond?
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• With growing investor emphasis on sustainability, green bonds are
one of the fastest growing market segments internationally.
• $36.5bn of green bonds were issued in 2014, almost tripling
2013 total green bond issuance.
• A record of $41.8bn green bonds were issued in 2015 making it
the biggest year ever for green bonds.
• As of April 2016, $16.8bn green bonds were issued globally1
1 Source: Bloomberg
A growing market
Source: Climate Bonds Initiative
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Green bonds geography
• The green bond market expanded further in 2015, thanks to a wider range of issuers and types of green assets, as well as new
geographies.
Source: Climate Bonds Initiative
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A diversified issuer base
• The UK, China, Germany, Japan, the Netherlands, Norway
and the US have shown significant growth in green bond
market size last year.
• Overall Europe remains the region hosting most green bonds,
with nearly USD 18.4 billion issued in 2015
Country Amount ($) Country Amount ($)
USA 10bn UK 0.7
Germany 5.6bn Denmark 0.6
Netherlands 4.1 Brazil 0.6
India 1.1 Mexico 0.5
China 1 Japan 0.5
Norway 0.9 Hong Kong 0.3
• 2015 saw a wider range of issuers and types of green
projects or assets. There was a widening of the type of
projects financed by green bonds with more proceeds
leveraged for other green sectors outside of the renewable
energy space, in particular low carbon transport and
sustainable water.
Source: Climate Bonds Initiative
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• LSEG is a partner exchange of the United Nations Sustainable Stock Exchanges (SSE) initiative.
• London Stock Exchange Group’s activity in green financing is focussed on two key areas: fixed income products and information
services/indices. Through a range of new initiatives, LSEG intends to broaden its offering and support London in becoming the
preferred listing venue for debt and equity Low Carbon Economy (LCE) financial instruments.
• Through its FTSE Russell business, LSEG is looking at further opportunities to increase transparency in the green bond market, by
providing issuers with a more efficient tool to report on sustainable initiatives, and offering investors a comprehensive product to
assess a wide range of financial instruments against an innovative Low Carbon Economy (LCE) framework.
LSEG and Green Financing
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• LSEG has welcomed 29 green bonds to its markets denominated in 7 different
currencies, which have raised approximately $6 billion equivalent.
• In 2015, 12 green bonds were listed on LSE – this translated to a 14.5% market
share of total green bond on EEA exchanges.
• London Stock Exchange has launched a range of dedicated ‘green bond’
segments, offering issuers a flexible range of market models, covering both
Regulated Market (RM) and MTF segments, comprising retail and wholesale,
and offering the choice of trade reporting, end-of-day and continuous quoting.
• No other global exchange has such a comprehensive specialist offering for green
bonds.
• Issuers can benefit from the additional transparency of secondary market trading
and global reach of the London markets.
Green Bonds on London Stock Exchange
"Together with the London Stock Exchange, UNEP and the Cambridge
Institute for Sustainability Leadership, we hope to impress upon you
London's commitment to build on existing market activity to ensure that
green finance sits right at the very top of the financial industry's agenda.“,
Mark Boleat Policy Chairman of the City of London
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London Stock Exchange Green Bond milestones:
• Dec 2009: first green bond listed by World Bank on London Stock Exchange’s markets
• Mar 2014: International Finance Corporation (IFC) issues the first Renminbi-denominated green bond, raising RMB 500 million. This
set the precedent as the first green bond issued by a multilateral institution in the offshore Chinese markets.
• May 2014: London Stock Exchange Group joins UN’s Sustainable Stock Exchanges (SSE) initiative.
• Apr 2015: Transport for London lists its debut green bond, raising £400 million, to improve sustainability of London transport network.
• Jun 2015: London Stock Exchange expands its range of dedicated green bond segments to offer increased flexibility for issuers
• Aug 2015: IFC issues the first offshore Indian Rupee denominated green bond, raising INR 3.15 bn.
• Oct 2015: Agricultural Bank of China lists a $1bn triple tranche, dual currency green bond, the largest green issue on London Stock
Exchange’s markets.
• Nov 2015: London Stock Exchange becomes an Observer to the internationally-recognised Green Bond Principles guidelines
• Jan 2016: LSEG joins the Green Infrastructure Investment Coalition (GIIC). The coalition was launched at COP21 by alliance of
global investors, development banks, financial sector associations & NGOs. Its aim is to support the financing of a rapid transition to a
low-carbon and climate resilient economy.
• Jan 2016: LSEG joins the City of London's Green Finance Initiative run in partnership with HMT and the Department of Energy and
Climate Change.
Green Bonds on London Stock Exchange
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• Green bonds have the same regulatory status of equivalent “non-green” bonds and can normally be issued through standard base
prospectuses.
• To admit green bonds to London Stock Exchange’s dedicated Green Bond segments, issuers are required to provide the Exchange
with the relevant “second opinion” document that certifies the ‘green’ nature of the bonds.
• The choice of the certification provider is up to the issuer and its advisers. London Stock Exchange has outlined guidance on a set of
criteria that the certifier should meet in order for the certified instruments to be included in the relevant LSE green bond segment.
How to list Green Bonds
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Issuers admitting bonds to the green bond segments on London Stock Exchange must provide a third party certification that the
instruments are considered “green bonds” and a written confirmation that the entity that has been appointed to conduct the green bond
certification meets the following criteria:
• Be a legal entity with a registered office in the European Economic Area or Switzerland and that such entity have the required
financial resources to conduct the verification.
• Be independent of the entity issuing the bond, its directors, senior management and advisers. In particular, the organisation providing
the second opinion must not be a subsidiary or owner, either in full or in part, of the entity issuing the bond.
• Be remunerated in a way that prevents any conflicts of interests arising as a result of the fee structure.
• Have the required financial resources to conduct the verification.
• Be an entity* specialising in assessing the framework of the bonds’ environmental objectives, with sufficient financial and market-
specific expertise to perform a comprehensive assessment of the use of proceeds. Such expertise could be demonstrated for
example by:
Affiliation with relevant and widely recognized industry bodies
Significant and appropriate previous experience in providing second opinions on green bonds
*e.g. a research organisation or a certification company, or an entity of which one of its departments offer services in the relevant certification industry
Green Bonds Certification
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Green Bonds Listed on London Stock Exchange dedicated Green Bond Segments and Sectors
ISIN Issuer Name Coupon(%) Currency Amount
Raised Issue Date
Maturity
Date Segment Sector
US45950VJC19 International Finance Corporation 4.75 MXN 500,000,000 29/04/2016 29/04/2021 PSTR UIDP
US45950VHX73 International Finance Corporation 2.125 USD 7,000,000 07/04/2015 07/04/2026 PSTR UIDP
US45950VHE92 International Finance Corporation 1.25 USD 500,000,000 27/11/2015 27/11/2018 PSTR UIDP
HK0000270386 Agricultural Bank of China 4.15 CNY 600,000,000 20/10/2015 20/10/2017 CWTU UICU
XS1308276168 Agricultural Bank of China 2.125 USD 400,000,000 20/10/2015 20/10/2018 CWTU UICU
XS1303791336 Agricultural Bank of China 2.75 USD 500,000,000 20/10/2015 20/10/2020 CWTU UICU
US45950VGQ32 International Finance Corporation 6.45 INR 3,150,000,000 10/08/2015 10/08/2020 PSTR UIDP
XS1253847815 City of Gothenburg Sweden 1.455 SEK 1,050,000,000 30/06/2015 30/06/2021 PSTR UIDP
XS1238024035 Shanks Group PLC 3.65 EUR 100,000,000 16/06/2015 16/06/2022 PSTR UIDP
XS1080036939 International Finance Corporation 2 CNY 500,000,000 26/06/2014 26/06/2017 PSTR UIDP
XS1222743061 Transport for London 2.125 GBP 400,000,000 24/04/2015 24/04/2025 PSTR UIDP
XS1048655184 Unilever PLC 2 GBP 250,000,000 26/03/2014 19/12/2018 PSTR UIDP
XS1073521988 City of Gothenburg Sweden 0.132 SEK 1,500,000,000 03/06/2014 03/06/2020 PSTR UIDP
XS1073488675 City of Gothenburg Sweden 2 SEK 310,000,000 03/06/2014 03/06/2020 PSTR UIDP
XS0976165828 City of Gothenburg Sweden 0.279 SEK 250,000,000 03/10/2013 03/10/2019 PSTR UIDP
XS0976166719 City of Gothenburg Sweden 2.915 SEK 250,000,000 03/10/2013 03/10/2019 PSTR UIDP
Green Bonds on London Stock Exchange
Data as at 26th April 2016
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Self-labelled Green Bonds listed on London Stock Exchange markets
ISIN Issuer Name Coupon(%) Currency Amount
Raised Issue Date
Maturity
Date Segment Sector
XS1399311064 Nordic Investment Bank 0.5 SEK 700,000,000 26/04/2016 26/04/2021 CWNR EIDW
XS1292474282 Nordic Investment Bank 0.375 EUR 500,000,000 17/09/2015 09/19/2022 CRNR EIDR
XS1239582684 Stockholm Lans Landsting 0.12 SEK 300,000,000 28/05/2015 28/05/2021 CWNR EIDW
XS1239582502 Stockholm Lans Landsting 1 SEK 1,500,000,000 28/05/2015 28/05/2021 CWNR EIDW
XS1222727536 Nordic Investment Bank 0.155 SEK 1,000,000,000 23/04/2015 23/04/2020 CWNR EIDW
XS1117504750 Development Bank of Japan 0.25 EUR 250,000,000 07/10/2014 06/10/2017 CWNU NIDU
XS1069349089 Stockholm Lans Landsting 2.125 SEK 230,000,000 19/05/2014 19/05/2020 CWNR EIDW
XS1069348941 Stockholm Lans Landsting 0.106 SEK 870,000,000 19/05/2014 19/05/2020 CWNR EIDW
XS1031495929 Nordic Investment Bank Fltg EUR 40,000,000 11/02/2014 11/02/2019 CWNR EIDW
XS0975173633 Nordic Investment Bank 2.413 SEK 500,000,000 27/09/2013 27/09/2018 CWNR EIDW
US29874QCN25 European Bank of Reconstruction
& Development 1.625 USD 250,000,000 17/09/2013 10/04/2018 CWNR EIDW
XS0824127277 Nordic Investment Bank 2.75 SEK 500,000,000 07/09/2012 07/09/2032 CWNR EIDW
Green Bonds on London Stock Exchange
Data as at 26th April 2016
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ISIN Issuer Description Coupon (%) Currency of
Issue Issue Date Maturity Market
XS1233613188 IBRD
Notes Linked to the Ethical Europe
Equity Index due July 5, 2023 - Green
Growth Bonds
Floating –
Index linked USD 28/07/2015 05/07/2023 MOT
XS1198278175 EIB 8.50 per cent. Climate Awareness Bonds
due 27th March, 2019 8.5 TRY 27/02/2015 27/03/2019 MOT
XS1107247725 EIB 1.75 per cent. Eurocooperation (Ecoop)
Bonds due 15th September, 2045 1.75 EUR 09/08/2014 15/09/2045 MOT
XS1247736793 EIB 0.875 per cent. Eurocooperation (Ecoop)
Bonds due 13 September 2024 0.875 EUR 17/06/2015 13/09/2024 MOT
XS1260085037 EIB 0.125 per cent. Eurocooperation (Ecoop)
Bonds due 15 June 2020 0.125 EUR 14/07/2015 15/06/2020 MOT
XS1183208328 EIB 1.00 per cent. Eurocooperation (Ecoop)
Bonds due 14 March 2031 0 EUR 05/02/2015 14/03/2031 MOT
XS1271698612 EIB 0.375 per cent. Eurocooperation (Ecoop)
Bonds due 15 March 2022 0.375 EUR 08/05/2015 15/03/2022 MOT
Green Bonds listed on Borsa Italiana MOT markets
Green Bonds on Italian MOT
Data as at 14th April 2016
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Case Studies
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Company Details
Company International Finance Corporation
(part of World Bank Group)
Market Main Market
Sector Supranational
Rating AAA/Aaa
Transaction Details
Issue Date 10 Aug 2015
Issue Size INR 3.15billion
Yield at issue 6.45%
Maturity 5 years
Company profile
IFC is one of the world’s largest financiers of
climate-smart projects for developing countries,
investing about $11 billion in long-term financing
over the last decade for renewable power,
energy efficiency, sustainable agriculture, green
buildings and private sector adaptation to climate
change.
“Addressing climate change is a priority for IFC in
India. IFC’s green Masala bond demonstrates
the powerful role of capital markets in mobilizing
savings for climate finance—and a listing in
London allows us to attract the widest possible
range of international investors. Adding the rupee
as a new green bond currency also supports our
goals to strengthen this important asset class.”
Debt issuance story
Sole arranger: JP Morgan
Proceeds from the offering used to finance a
green bond issued by Yes Bank, one of India’s
largest commercial banks. Yes Bank invested the
proceeds of its bond in renewable energy and
energy efficiency projects, mainly in the solar and
wind sectors.
Under its $3 billion offshore rupee Masala bond
program, IFC has issued bonds worth over 103
billion rupees ($1.66 billion) in a range of tenors,
building a triple-A yield curve and attracting new
investors to the London offshore rupee market.
Using Green offshore rupee bond issuance to finance Indian
infrastructure
Source: IFC press release, LSEG database, August 2015
Case Study
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Company Details
Company International Finance Corporation
(part of World Bank Group)
Market Main Market
Sector Supranational
Rating AAA/Aaa
Transaction Details
Issue Date 17 Jun 2014
Issue Size RMB 500 million
Yield at issue 2.00%
Maturity 3 years
Company profile
IFC is one of the world’s largest financiers of
climate-smart projects for developing countries,
investing about $11 billion in long-term financing
over the last decade for renewable power, energy
efficiency, sustainable agriculture, green buildings
and private sector adaptation to climate change.
“IFC is committed to supporting the development of
China’s capital markets, which are key to creating
access to finance for the private sector and
especially small and medium businesses. We will
continue to seek opportunities to help deepen
liquidity and extend the yield curve for offshore
renminbi assets. The addition of the renminbi as a
new green bond currency also supports our goals to
strengthen this important asset class.”
Debt issuance story
Sole arranger: HSBC
Proceeds from the offering to support projects to
reduce greenhouse gas emissions—for example,
by rehabilitating power plants and transmission
facilities, installing solar and wind power, and
providing financing for technology that helps
generate and use energy more efficiently.
In March 2014, IFC became the first multilateral
institution to list renminbi-denominated bonds on
LSE, raising 2 billion renminbi from international
investors. IFC was also the first to set up a
program to regularly issue offshore renminbi-
denominated discount notes.
Using Green offshore renminbi bond issuance to finance Chinese
climate-friendly investments
Source: IFC press release, LSEG database, June 2014
Case Study
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Company Details
Company Agricultural Bank of China
Market PSM
Sector Financials
Rating A1/A
Transaction Details
Issue Date 20 Oct 2015
Issue Size $400 million / $500 million /
RMB 600 million
Yield at issue 2.125% / 2.75% / 4.15%
Maturity 3 years / 5 years / 2 years
Company profile
Agricultural Bank of China is one of the top four
commercial banks in China. ABC is one of the first
standing members of the green finance committee
of China Society for Finance and Banking. In 2013,
ABC signed the green credit commitment along with
other financial institutions, and formulated green
credit standards and protocols.
“The successful issuance and listing of ABC’s green
bonds on the London Stock Exchange not only fulfils
our ambition that was announced as part of the
policy outcomes of the latest UK-China Economic
and Financial Dialogue, but also manifests the close
and fruitful cooperation between Chinese and UK
financial institutions on green finance, climate
change and adaption initiatives.”
Debt issuance story
Joint Leads: ABC, BAML, Barclays, GS HSBC,
JPM, MS, SCB, Wells Fargo
Based on the green bond management framework,
the proceeds from the offering will support
renewable energy, energy efficiency, sustainable
waste management, sustainable use of land, clean
transportation and sustainable water management.
The listing is the first international Green Bond
issue by a Chinese bank, as well as the first listed
Green RMB bond for ABC on the London Stock
Exchange.
Using Green offshore dual currency bond issuance to finance
green projects
Case Study
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Company Details
Company Transport for London
Market Main Market
Sector Government
Rating AA+/Aa2/AA
Transaction Details
Issue Date 24 Apr 2015
Issue Size £400 million
Yield at issue 2.125% (G10yr+57bp)
Maturity 10 years
Company profile
Transport for London (TfL) is the owner and
operator of the largest integrated transport
networks in Europe. TfL is a statutory corporation
and is a functional body of the Greater London
Authority (GLA)
UK's leading public sector issuer of capital
markets debt after the UK Government's Debt
Management Office with around £8.5bn of
borrowings raised from a variety of sources and
a further £4.5bn borrowing requirement up to
2021
TfL was the first UK corporate to issue sterling
denominated Green bonds
Debt issuance story
Joint Lead Managers: Deutsche Bank, Bank
of America Merrill Lynch (BoAML)
Third Party opinion provided by DNV GL
Proceeds will support the objectives of TfL’s
corporate environmental framework, which
includes reducing air pollution in the city,
improving natural resource management and
preparing for potential climate change effects
Deutsche Bank also publicly announced that
will invest in the bond, which the Bank will
hold within its Green Liquidity Portfolio
Case Study
Using Green bond issuance to finance green Railway projects
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Company Details
Company Shanks Group plc
Market Main Market (LSE)
Sector Waste & Disposal Services
Rating n/a
Transaction Details
Issue Date 16 Jun 2015
Issue Size €100 million
Yield at issue 3.65%
Maturity 7 years
Company profile
Shanks Group is a leading international waste to
product business
Company was founded in 1880 as a construction
company operating primarily in the West of
Scotland under the name of Shanks & McEwan
Listed on London Stock Exchange’s Main Market
since 1988
Debt issuance story
Lead Managers: BNP Paribas, KBC Bank
Shanks is the first UK company to issue Green
Bonds in Euros and list them on LSE
The net proceeds of the issue will be used to
finance Shanks' ongoing programme of
investment in sustainable infrastructure.
Minimum Denomination: €1000
Case Study
Using Green Bond issuance to tap into retail investor liquidity
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Company Details
Company Development Bank of Japan
Market PSM
Sector Government
Rating A1/A
Transaction Details
Issue Date 21 Oct 2015
Issue Size EUR 300 million
Yield at issue 0.375%
Maturity 4 years
Press Release
“DBJ successfully took in new investors by
broadening the asset classed applicable for the new
issue’s use of proceeds.” Goldman Sachs
“Following the issuance of the DBJ’s first Green Bond
last year, this inaugural Euro denominated
sustainability bond has positioned the bank as a
clear leader in the rapidly growing SRI fixed income
market. At the same time it enabled the bank to reach
a more diversified investor base including SRI
focused investors” BAML
“The transaction attracted both new and existing DBJ
green and sustainability investors, all while achieving
a competitive pricing outcome” JPMorgan
Debt issuance story
Joint Leads: Merrill Lynch International, Morgan
Stanley & Co. International, JPMorgan
Securities, Goldman Sachs International.
This bond is the first sustainability bond issued
by a Japanese issuer. DNJ has expanded the
use of proceeds to include DBJ Environmentally
Rated Loan Program in addition to DBJ Green
Building Certification.
On 7 Oct 2014, DBJ issued its first Green Bond
on London Stock Exchange.
Using sustainability bond issuance to tap into ESG
investors liquidity pool
Source: DBJ press release, LSEG database
Case Study
Distribution by Investor Type
Banks 61%
Asset Manager 13%
Insurance 11%
Central Banks 7%
Others 8%
Geographical Distribution
EMEA 97%
US Offshore 3%
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Company Details
Company World Bank
Market MOT (Borsa Italiana)
Sector Supranational
Rating AAA/Aaa/AAA
Transaction Details
Issue Date 29 Jun 2015
Issue Size $84 million
Coupon Linked to Ethical Equity Index
Maturity 8 years
Company profile
World Bank provides low-interest loans and grants
to developing countries. These support a wide
array of investments in such areas as education,
health, infrastructure, and environmental and
natural resource management
Established in 1944, the World Bank Group is
headquartered in Washington, D.C and employs
more than 10,000 employees worldwide
Since its first green bond launched in 2008, the
World Bank has issued 100 green bonds in 18
currencies, totalling over USD 8.4 billion
equivalent
Debt issuance story
Lead Manager: BNP Paribas
The bonds were distributed to Italian retail
investors through a network of 16 retail banks
and brokers
The issue is part of the World Bank’s Green
Growth Bond programme for issuance of retail
instruments in the US and a number of European
markets
Minimum denomination: $2000
Bond performance is fixed for the first two years
(1.75% coupon) and then linked to the
performance of the Ethical Europe Equity Index.
Redemption at maturity (100) guaranteed by the
World Bank
Case Study
Using Green Bonds to expand private investors product
range
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Contact us Fixed Income
London Stock Exchange
Mail: [email protected]
Tel: +44 (0)20 7797 3921
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