March 7, 2018 |
With global green bond issues reaching $156 billion in 2017, the Climate Bonds Initiative (CBI) predicts 60% growth to at least $250 billion this year, followed by an annual doubling of volumes through the end of 2020. But even with record low interest rates, Latin American issuers still appear reluctant to get behind green bonds. Issuers in the region sold just $8.1 billion in green paper in 2017, and nearly half of that came from a single entity. But the few issuers that came to the market with green bonds, such as the Brazilian paper companies Klabin and Fibria, managed to raise cut-rate debt over medium- and long-term maturities.
Klabin priced a 10-year, $500 million green bond at 4.95%
Green bond advocates want companies to engage more with environmentally conscious investors. But are issuers willing to go that extra mile to ensure growth of sustainable securities in Latin America?