Canadian Green Bond Market Riding High after Record Quarter


TORONTO, July 12 Reuters Canadian companies issued a record amount of green bonds in the second quarter, and bankers expect the debt instrument will become more popular because issuers are able to charge a premium that environmentallyfriendly investors are willing to pay.

With corporations and financial institutions facing growing pressure from investors to embrace more environmentallysustainable practices, green bonds are seen by some as one way to work towards the transition to a clean energy future.

One of the reasons they are catching on in the fixedincome world is the debt tends to be sold at a premium, consistently eking out one to six basis points over the price of a nongreen bond, which lowers the cost of raising money for the issuer.

Green bond issuance in Canada rose to C4.9 billion 3.9 billion in the second quarter, its best showing so far and up from C2.6 billion in the first quarter, Refinitiv data showed. Global green bond issuance, however, slowed to 126 billion in the second quarter, from 130.8 billion in the first three months of the year.

RBC Capital Markets, TD Securities Inc and CIBC World Markets Inc were the top book runners for Canadian green bonds.

The climate agenda has accelerated globally and being at the forefront of the agenda are corporations, investors and governments, said Valerie Lemieux, head of public sector Canada for HSBC Bank Canada.

Green bonds are fixedincome securities that generate capital for projects that offer…

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