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‘Greenium’ Persists in US Green Bond Market – CBI  

Thirty-two percent of green bonds achieved a ‘greenium’ in the first half of 2023, according to new analysis from the Climate Bonds Initiative (CBI). A sample of 50 green bonds, during H1 2023, were found to be 16 priced inside their own secondary market yield curves. These results are included in the latest iteration of the Green Bonds Pricing in the Primary Market Series, sponsored by IFC, which assesses bonds denominated in EUR or USD, across countries and issuer types. The period saw particularly strong pricing metrics for USD deals with average book cover for USD denominated green bonds being 5.4 times the deal size. The period covered 111 green bonds overall with a combined volume of US$124.6 billion with green bonds in both EUR and USD performing well on all metrics in the primary market, on average, and allocations to green investors remaining stable at 66%. Among other highlights, three EU sovereigns return to the green bond market and Israel priced its debut sovereign green bond deal. Caroline Harrison, Head of Market Research, CBI: “The glowing green bond pricing metrics continue to demonstrate the strong investor appetite for these instruments. Investors are keen to finance the decarbonisation of our economy, and issuers should leverage this by prioritising green investment.” Further, the CBI has released guidance to assist stakeholders in understanding the fundamental markets of credible transition plans. Sean Kidney, CEO of CBI, said:  “Transition plans are the linchpin in the journey towards the Paris goals. They must be built on clear targets, effective strategies, ample financial support, and unwavering leadership. Transparency through regular progress disclosure is paramount, but evaluating these plans can be difficult. To bolster investor and stakeholder trust, Certification is paramount to underscore the credibility of these crucial blueprints.” 

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