15/01/21

SUSTAINABLE FINANCE: Market set records in 2020, according to report.

As published on investmentexecutive.com, Thursday 14 January, 2021.

Amid strength in global debt and equity markets last year, the sustainable finance market had a record year in 2020 too, reported Refinitiv, a market data company, on Thursday.

Last year, global issuance of sustainable finance bonds totalled US$544.3 billion, which was more than double the previous year’s total and an all-time record, Refinitiv said.

The fourth quarter of 2020 also set a quarterly record, with US$180.4 billion of issuance.

Green bond issuance finished the year up by 26% to US$222.6 billion, the firm said. This also represented an all-time record.

“Driven by an increase in capital raising by sovereigns, multilaterals and banks for Covid-19 relief and recovery efforts, the sustainability and social bond categories each surpassed US$$100 billion for the first time,” Refinitiv said

Equity issuance for sustainable companies also rose by 65% last year to US$13.8 billion — a record for sustainable equity activity, the firm reported.

In the sustainable underwriting league tables, JP Morgan led the way in bond underwriting, Refinitiv said. BNP Paribas and Credit Agricole ranked second and third, respectively. TD Securities placed 11th.

On the equity side, Morgan Stanley was the top underwriter, followed by BofA Securities and JP Morgan. National Bank of Canada ranked 13th.

While the markets for new debt and equity were setting records last year, other corners of the sustainable finance business weren’t as strong.

Sustainable syndicated lending increased by just 3% last year to US$199.4 billion.

As well, mergers and acquisitions involving sustainable companies declined by 9% to US$32.3 billion.

Refinitiv reported that Goldman Sachs led the M&A advisory league tables in 2020, with JP Morgan ranking second, and Nomura sitting third. Scotia and BMO Capital Markets tied for ninth place, and RBC Capital Markets ranked 15th.