Our new China Green Bond Market Newsletter with all the latest bond issuance, market developments and updates
In the third quarter, China’s green bond market gained further momentum, bolstered by city commercial banks and local government investment and financing vehicles. The issuance amounted to USD9.38bn (RMB62.36bn), up 13% qoq, making the largest quarterly issuance of the year.
Headline figures for Q3:
2017 issuance to Q3: USD20.91bn (RMB141.87bn)
Percentage of internationally-aligned Chinese labelled green bonds: 63.5%
All Chinese green bonds were designated investment grade with more diverse notches (except for privately placed debt financing tools and subprime asset-backed securities)
More long-term Chinese green bonds emerged
57% of issuance received second party reviews
Top 3 largest issuers of Q3:
Wuhan Metro (RMB6.5bn)
China Development Bank (RMB5bn)
China Three Gorges (RMB3.5bn)
Also in this edition:
The fifth national financial work conference encourages the development of green finance
Local governments actively promote green financial reform and establish innovation pilot zones
Nine local government bonds included in the ChinaBond Green Bond Indices
The first retail green bonds on sale
Shanghai Stock Exchange and Luxembourg Stock Exchange tightened partnership to promote green bonds
Green Bond Discussion
In this edition, we take a closer look at the growing trend of green finance from state to local level, and the need for better environmental disclosure on local government green bonds.
While we expect to see cities and sub-sovereigns increasingly turning to the green bond market, and that sovereign or sub-sovereign issuance to fuel China’s market momentum going forward, we also see the need for better disclosure on use of proceeds and environmental benefits of bond issuance.
China Central Depository and Clearing (CCDC) announced in late August that they would include nine local government bonds in their ChinaBond China Green Bond Indices. However, throughout the identification process, it is found that in terms of environmental disclosure on special bonds, there is still room for local government to improve.
There are some discrepancies in the level of disclosure on underlying projects information at this level and there is absence of disclosure about quantitative indicators of the projects.
Read more in the full Quarterly Newsletter, please click here.
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