The outstanding amount of European environment social and governance (ESG) government bonds reached a record €411 billion in the third quarter, although issuance had slowed, according to the latest bond report card by the Association or Financial Markets in Europe (AFME).
The outstanding volume of ESG sovereign bonds grew by only 1% in Europe as of September 2023.
This follows a record quarter in 2Q23 when the outstanding volume of European
sovereign ESG bonds increased by 11% to €406 billion from €366 billion in the first three months of the year.
The third quarter saw issuance by the UK at €3.1 billion, Germany, €1.5 billion and France €1 billion, in their respective green bond programmes.
Austria issued an additional €1.5 bn in green bills during 3Q23, as volumes maturing were rolled over into new issuance as part of its short-term green issuance programme.
Most recently in 4Q23 to date, the European Commission has issued €4.7 billion via tap issuance of existing green references, following no green issuance during 3Q23.
The UK and Spain have also issued an additional €2.3 billion and €1.9 billion respectively.
Separately at an AFME bond conference in November, participants in the supranational, sovereign and agency bond market were complaining over the dwindling of the greenium -tighter pricing for securities perceived by investors as green.
This is despite its precense in the financial institutions and corporate bond markets.
The divergence is caused by fluctuating levels of demand for green bonds of different types.
© Markets Media Europe 2023
