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U.S. green bond sales jump 50% as Biden addresses climate change

Background

Green bonds are having a moment in the spotlight.

 

Sales of green bonds – the largest category of sustainable debt by dollar volume – grew by 13% to a record $305.3 billion in 2020, after a slowdown in the first half of the year, according to BloombergNEF. Cumulative green bond issuance since 2007 exceeds $1 trillion.

 

“There’s increased demand for green bonds driven by investor demand, the regulatory push and sharpening of green support from the European Central Bank going forward,” Sylvain de Bus, deputy head of global bonds at Candriam Belgium, told Bloomberg News.

 

The issue

The market for green bonds may get a boost from the Biden administration. U.S. green bond sales jumped more than 50% this year, as President Joe Biden pledged action on climate change. That’s still less than a third of the growth rate seen worldwide.

 

Image showing US green bonds

 

The chart shows $143 billion in global green bonds have been issued so far this year. The left-hand columns of the table show JP Morgan claims the largest underwriting credit, while the right-hand columns show the bank earned $62 million in fees for bringing green bond deals to market. That’s 7.35% of the fees earned in this market year-to-date.

 

Currently, Germany leads green bond issuance, with 13% of total issuance, and the U.S. ranks fourth at 8.4%. A Biden administration shift in national policy, including the adoption of a regulatory green bond classification system, might help spur growth.

 

The Bloomberg Terminal allows users to monitor issuance and underwriting fees of green bonds worldwide.

 

Tracking

To see a breakdown by country, use Bloomberg’s League Table function.

 

Image showing global green bonds

 

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