Deutsche Bank announced today that it has led three green bond issues in the past week, raising over $1.3 billion in green debt for clients. The 3 deals include a 600 million euro bond for Assicurazioni Generali, a 500 million euro bond for NEPI Rockcastle and a 500 million dollar bond for Kimco Realty.
The bank’s success in generating green bond business comes despite a downturn in the market for the security class, as total new issues have reached only slightly less than $70 billion in the first six months of this year, compared with $125 billion in the same period last year.
According to Deutsche Bank, the decline in the green bond market has been driven by the COVID-19 pandemic, as issuers have become less likely to segregate funding to green assets in order to retain a pool of liquidity in case it is required for the crisis.
Overall, however, the sustainability linked debt market has shifted, driven by a substantial increase in social and sustainability bonds, particularly from sovereigns looking to raise proceeds to finance policies around the pandemic.
Trisha Taneja, Head of Sustainable Finance in Deutsche Bank’s Investment Bank business, said:
“The Covid pandemic is a tangible example of how non-financial factors can cause systemic risk to the global financial system. Corporates are increasingly starting to incorporate sustainability and ESG factors into their long-term plans to manage profitability and risk. Deutsche Bank strategists estimate that by 2030 almost 100 percent of investors’ assets under management will be under responsible investment strategy.”
According to Dealogic, Deutsche Bank has been climbing the ranks of the green bond issuance market, reaching 7th place in Q2 2020 with market share of 4.1%, up from thirteenth position and a 2.1 percent market share at the end of last year.