IFC and Amundi to launch Green Bond Fund of 2 billion dollars

International Finance Corporation, IFC, and Amundi (AMUN:FP), a leading European Asset Manager, have agreed to create the largest green-bond fund dedicated to emerging markets. It is a $2 billion initiative that aims to deepen local capital markets and expand financing for climate investments.

IFC will invest up to $325 million in the new Green Cornerstone Bond Fund, which will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe, and Central Asia.

Amundi will raise the rest of the $2 billion from institutional investors worldwide and will provide its services in managing emerging-market debt. The fund aims to be fully invested in green bonds within seven years.

IFC and Amundi expect the new fund to encourage more local financial institutions to issue green bonds by increasing global demand and building local markets. Together, through a donor-funded investment support facility led by IFC, they will work with local financial institutions to strengthen their capacity to issue green bonds, providing training and sharing international best practices with them.

– This green-bond fund will lower the risk for the private sector and attract new investors, essentially creating a market where there was none,” said IFC CEO Philippe Le Houérou. 

– This innovative partnership with IFC is a major achievement for Amundi. This project highlights the strong capabilities in green financial innovation of Credit Agricole Group. I consider this project as a game changer: it is both an investment opportunity for institutional investors and it will have an impact on society by accelerating the shift of emerging markets toward a green economy, said Xavier Musca, Chairman of Amundi.

 

The Bank Group (the World Bank and IFC) is a major issuer of green bonds. So far, the World Bank has issued $8.5 billion in green bonds in 18 currencies. IFC has issued $5.8 billion in 12 currencies.

Finance

Green Bonds volume up 75 % in Q1 2017

Green Bonds issuance was up 75 % during the first Q this year compared to year earlier. The rating agency Moody´s said that the issuance was totally 29,5 billion dollars during that time and one of the biggest issuers was France with the sovereign green bond.

The financing was mostly for renewable energy and energy efficiency during the first months of this year. The estimate for the whole year 2017 is the same, 120 billion dollars.

The global Green Bonds markets are expected to have more growth from Singapore, while the country´s Central Bank has launched a Green Bond Grant Scheme during this spring. This allows qualifying issuers to offset the expences of external review for Green Bonds. According to the Scheme, the offset is up to 66.000 euros per issuance.

 

Finance

SwissRE: Geopolitical risk is changing

According to SwissRe (SREN) Chairman Walter B. Kielholz, the European geopolitical risk is changing with Brexit, referendums, Trum-Jump in the US and digitalization. – We have seen different geopolitical risks in the markets and we are focusing more on risk management, he said in the Swedish Swiss Chamber of Commerce event in Zurich last week.

He said that the insurance company is making competitive edge from talent, data, client relationships and climate change.

SwissRe is listed in Zurich and it is the second largest reinsurane companies in the word. The company reported 3 billion dollars net income in the first ninth month this year, compared to 3,7 billion dollars a year earlier.  Earnings per share were 9,15 dollars compared to 10,69 dollars. The company has also announced the largest natural disaster insurance programmes in China.

Business Finance

EIB issued a new 500 million euros Green Bond

The European Investment Bank (EIB), the development institution owned by the EU Member States, rated Aaa/AAA/AAA (Moody’s / Standard and Poor’s / Fitch), issued a new EUR 500m Climate Awareness Bond (CAB) or so called Green Bond in late September.

With this new transaction, EIB continues to spur the sustainable growth of the Green Bond market, by giving long-term investors the opportunity to own a 21-year Green Bond in EUR for the first time. Today’s CAB 37 is the fourth benchmark on EIB’s EUR Green Bond curve, a meaningful complement to its existing 3-, 7- and 10-year reference lines.

The 21-year issue carries an annual coupon of 0.5%, and has been priced in line with the outstanding EIB ECoop curve at a reoffer yield of mid swaps -10bp, equivalent to 38.9 bps over the 4% Bund Jan-37.

EIB continues to benefit from a strong European following in the CAB programme with 25% from Germany, 21% from France and 18% from Netherlands.

EIB’s total Green Bond issuance amounts to  15 billion euros across 11 currencies of which 7.6 billion euros denominated in EUR.

Finance

Green Bond from the Bank of China – financing environmental projects

The Bank of China has issued 3 billion dollars multicurrency Green Bond after drawing orders worth of 7,8 billion dollars. The projects will be in renewable energy, pollution prevention and control, clean transport and sustainable water management, the bank said.

The loan is in euros, US dollars and yuan. The credit rating agency Fitch has confirmed that the Bank of China is getting A-rating for its Green Bonds.

 

Finance

S&P downgraded the UK credit rating

The global rating company Standard & Poor´s announced on Monday evening that they have downgraded the UK sovereign rating from triple A to AA.  According to the rating agency, this downgrading will reflect the economic, fiscal and constitutional risks of the last week´s Brexit vote. S&P’s ratings outlook is negative, which might indicate additional downgrades in the future.

A double-A rating places the UK with Belgium and France. Germany, the Netherlands and Austria are having triple A ratings.

The rating agency is also expecting that the UK GDP will grow only by average 1,1 % on a year, compared to 2,1 % the agency estimated in April.

 

Business Finance

UK Brexit-leave was a Black Friday for markets

The UK decision to leave the EU was a Black Friday for the financial markets.  The sterling plumped to over 30 years low, to 1,32 dollars and the stock exchanges all over Europe were showing declining trend.

Banks and insurance companies were the most losers, because the City, which employs  over 700 000 financial specialists, is now uncertain about the future of the London City as a capital of European financial markets. FTSE 100 index was down by 8,7 percent.

Financial topics today on Friday 24th June 2016:

  • Yen surgers by 3,2 percent against dollar to 99,02
  • FTSE100 -index slides by 8,7 percent
  • S&P500 index futures slump with over 5 percent, tiggering a trading curb
  • Gold reaches new high levels with over 8 percent rise
  • Oil prices were down
  • S&P is considering lowering UK rating from tripe A
  • Goldman Sachs predicts that the Bank of England will cut rate in August
  • London property prises are expected to decrease – REITs and property company shares were down in London Stock Exhange
  • The vote may have overall impact of the big tech companies investments in the City
  • The Fed is expexted to hold their rate increase decision 

 

 

Business Finance