HomeEconomyAnalysis - European governments fight market volatility with bumper green bond harvest Economy Analysis – European governments fight market volatility with bumper green bond harvest By inew September 15, 2022 0 121 views Share FacebookTwitterPinterestWhatsApp NNBR +1.% Add to Watchlist/From Remove from watch list Add to watch list Add Location Job added successfully: Please name your portfolio type:purchase Sell date: quantity: price Point value: Leverage: 1:1 1: 1: 1: 1: 10 Yoruk Bahceli (Reuters) – Eurozone governments have raised Billion Euros ($ billion) from green bonds in the past two weeks, pushing volumes higher than a year ago despite v olatility cuts the distribution of the broader market. High inflation and rapidly rising interest rates have brought turmoil to world markets not seen in years, leading to widespread caution among borrowers . But that doesn’t seem to dampen demand for green government bonds that fund green projects. Belgium on Wednesday became the third European country to sell green bonds in two weeks, from a new 100 bond. Germany proposed 4. received 10 in August new five-year bond offering billion euros and Italy received 6 billion euros in revenue from -superior Weekly offerings of the year. Euro market governments have raised 15 billion euros in green bonds so far this year, according to ING Bank higher than billion in comparable periods) . Bram Bos, Responsible Lead Portfolio Manager for Green, Social and Impact Bonds500 NN (Nasdaq: 335NNBR) Investment Partners said the government green bond market The momentum is “very strong” and the conflict in Ukraine could provide a further boost. “The war in Ukraine has sparked a lot of investment in renewable energy. Much of this will be funded by the government,” he said. “This is definitely a trigger for the government to issue more green bonds in the future.” “Smooth Execution” The growth in sovereign green bond sales contrasts sharply with the broader green bond market, where issuances – which also include corporates – are for reached $1 billion at the end of August, while the U.S. dollar was 50 Billion at the same time 75, according to UniCredit. It has lowered its forecast for overall green bond issuance this year to $12 billion, down about % from last year. The rise in corporate green bonds this year has seen a surge in interest rates and recession fears dampening investor demand for corporate debt. Issuance fell alongside traditional bond issuance. “The government has a firmer commitment to maintaining a level of its green activity, if only to signal the wider market,” ING Senior rates strategist Benjamin Schroeder said. While corporations are generally opportunistic borrowers and are more likely to change financing plans as market conditions change, sovereigns – must fund national budgets – Less flexibility. ING data shows that while the “greening” of debt in the secondary market has shrunk in recent months, government issuance has also increased. “Greenium” refers to green bonds with slightly lower yields compared to traditional bonds, reflecting the advertised educated cast Investors are chasing a limited number of these assets. ING believes the decline is the result of a general deterioration in liquidity in the government bond market. Analysts said the government could face shrinking pricing gains as a result, but would still be able to attract more sustainable investors focused on securities such as green bonds. “When I look at our green bond strategy, we have a record inflow this year, which is remarkable, Because most conventional fixed-income strategies face outflows,” said the boss of NN Investment Partners. Belgian debt agency director Marik Post estimates that green bonds issued on Wednesday could still offer a 1-to-1.5 pricing yield relative to traditional bonds basis of sales. “In this sense, we believe that the green element allows us to improve the terms and will be more difficult to execute smoothly,” he told Reuters. Last week A banker managing the Italian green bond sale said the bank had arranged the deal taking into account the uncertainty of the election when deciding on its format. Italy will hold general elections in September . “We believe that, In that environment, a green offering would provide an additional benefit to Italy and would definitely help them get a very good deal,” said the banker, who asked not to be named. 39 Share FacebookTwitterPinterestWhatsApp Previous articleMarket Thinking: Struggle for EnergyNext articleSouth African Reserve Bank to hike rates by 75bps to 6.25% on Sept. 22: Reuters poll inewhttps://inew.news RELATED ARTICLES Economy BP’s US boss to leave company weeks after CEO Looney September 30, 2023 Economy US stock market’s powerhouses tested by soaring bond yields September 30, 2023 Economy Factbox-How a US government shutdown would affect foreign policy September 29, 2023 LEAVE A REPLY Cancel reply Comment: Please enter your comment! Name:* Please enter your name here Email:* You have entered an incorrect email address! 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