The National Treasury Management Agency (NTMA) is likely to proceed with the sale of an estimated €3 billion of green bonds imminently, after Minister for Finance Paschal Donohoe unveils Budget 2019 on Tuesday, according to Cantor Fitzgerald.
Cantor Fitzgerald’s head of fixed-income strategy in Ireland, Ryan McGrath, said in a note to clients on Tuesday morning that the NTMA had deliberately kept October vacant on its regular bond auction calendar to allow it to issue its first Irish sovereign green bond during the month. The NTMA had previously indicated that issuance would be in “live mode” any time following the Budget announcement on Tuesday afternoon.
“Given the NTMA’s style and history, issuance will be expected sooner rather than later,” Mr McGrath said, adding that the maturity of the bonds are likely to be “at the lower end of the 10-year to 15-year range.”
The Government’s plans to enter the mushrooming green-bond space comes as a UN report published on Monday warned of heightened threat to the planet before 2040 as the immediate consequences of climate change are worse than previously thought. Ireland is on track to be among the few European Union countries to miss 2020 emission-reduction targets and has been ranked by the 2018 Climate Change Performance Index as the worst performing European country.
The green bonds will be aimed at funding projects that promote climate change mitigation. Green bond issuance has topped $100 billion (€87.2 billion) so far this year, with the Belgian and the French governments counting as the two largest sovereign issuers, according to Bloomberg data. Still, issuance will have to increase significantly in the coming months to match last year’s $173 billion record. JP Morgan and HSBC in France have been advising the NTMA on its first green-bond sale.
Source Irish Times