Ireland sells 2 billion euros of green bonds at low yield

By Padraic Halpin

DUBLIN (Reuters) – Ireland raised 2 billion euros on Thursday from the sale of green bonds at a yield well below a debut sale a year ago, highlighting the growing popularity of the bonds which provide cash for projects with environmental benefits.

Dublin mandated a syndicate of banks to tap its solitary green bond that matures in 2031, having raised 3 billion euros ($3.31 billion) from its initial sale a year ago.

Ireland sold the then debut 12-year green bond at a yield of 1.4% but with bond yields tumbling further in the last 12 months, Thursday’s sale was priced at 26 basis points through mid-swaps, a spokesman for the country’s debt office said.

That implies a yield just under 0.24%. Ireland received 11 billion euros worth of orders, the spokesman said, a similar level of demand from a year ago.

Although green bonds make up a fraction of the overall market, global interest has soared as banks, sovereigns and companies look to tap into increasing investor appetite as calls grow for tougher and swifter steps against climate change.

Led by issuance in France and the Netherlands, a total of 8 billion euros in sovereign green bonds were issued in the second quarter, the greatest quarterly change to date, the Association for Financial Markets in Europe said last month.

Ireland has now raised 14.25 billion euros of its 14 billion to 18 billion euro bond sales target for the year, with one more regular auction scheduled to take place next month.

The National Treasury Management Agency (NTMA) mandated BNP Paribas (PA:), Barclays (L:) Bank of America Merrill Lynch (N:), Danske Bank (CO:), Davy Stockbrokers and J.P. Morgan (N:) as joint lead managers on the deal.

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