Bond volumes off target but optimism shines through

With only $25bn of green bonds issued so far, volumes of SRI instruments in 2015 are a little disappointing. Predictions at the beginning of the year that $100bn of green bonds would be issued in 2015 are likely to be wide of the mark, with many now saying the end of year total could struggle to match 2014’s $37bn. But few in this developing market are downhearted, preferring to see 2015 as a year of consolidation and necessary adjustment as the product reacts to poor general market conditions and begins to mature. In fact, despite the low volumes, progress is being made. The issuer base is beginning to expand beyond the confines of the public sector, as more banks join the list of issuers. Emerging market companies are also turning to the market, such as Brazil’s BRF with a €500m deal in June. Meanwhile, the investor base is growing in a healthy fashion, with Barclays and Deutsche pledging to invest £1bn and €1bn respectively in green bonds. As for 2016, expectations are that volumes will bounce back, with companies and municipalities leading the charge, along with more banks and emerging market issuers from Latin America. These topics and many more were discussed at GlobalCapital’s SRI roundtable in New York in mid-September.