Stockholm (NordSIP) – On March 28, Environmental Finance announced the winners of the Green Bond of the Year awards for 2017. The laureates are selected by a panel of judges made up of some of the largest green bond investors. The awards aim to recognise best practice, or issues that were significant in the development of the market.
This year, there are a total of 32 awards, up from 25 last year and 15 the year before. This increase reflects the tremendous expansion of the market into new categories.
Danish energy company Ørsted was awarded the Green Bond of the Year award in the ‘corporate’ category. The green bond issue that was considered as a basis for the prize was the company’s first capital markets transaction following the disposal of its oil & gas business. It was also the first green hybrid issue in the Nordic region. These types of bonds have some equity-like features, such as the payment of a coupon. Frequently however, the maturity date is undefined, and the issuer can defer or cancel coupons without triggering a default.
According to Environmental Finance, Ørsted plans to use the green bond proceeds to help install up to 12GW of offshore wind by 2025, and replace coal power generation with sustainable biomass by 2023. The goal is to reduce the emissions of the company’s power and heat generation by 95% by 2023. The transaction was conducted with an intraday execution strategy, allowing Ørsted to capitalise on a favourable market-open, while avoiding any overnight market risk which a prolonged market period may have brought. The green bond framework was given a dark green shade by Cicero, which noted the company’s shift towards renewable energy. One of the panel of investor judges said Ørsted has become “a very green company”, and also noted that the pricing was “fair for investors”.
Other winners include Barclays, in the ‘bank’ category for its landmark use of property energy efficiency data. The Republic of France took home the award in the ‘sovereign’ category. Its €7 billion issue in January 2017 with subsequent taps that took the total amount raised to about €9.7 billion. The City Of Cape Town and New York City MTA also made the winners’ list in the ‘local authority’ and ‘municipal’ category, respectively.
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