NTMA hoping to raise up to €3bn from green bond sale

The National Treasury Management Agency (NTMA) has hired banks to sell the Republic's first green bond, which is expected to raise up to €3 billion.

Market sources said the sale is expected to go ahead as early as Wednesday, but may not be completed until the following day.

Barclays, BNP Paribas, Citigroup, Danske Bank, HSBC and JP Morgan are the lead managers of the 12-year bonds, the NTMA said on Tuesday afternoon, a little over an hour after Minister for Finance Paschal Donohoe flagged the imminent deal in his Budget 2019 speech.

Cantor Fitzgerald’s head of fixed-income strategy in Ireland, Ryan McGrath, had said in a note to clients earlier in the day that the green bond transaction, which the NTMA had previously said it was planning, would likely to “live” following the budget announcement.

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The Government’s plans to enter the mushrooming green bond space come as a UN report published on Monday warned of a heightened threat to the planet before 2040 due to climate change.

The State is among a few European Union countries set to miss 2020 emission-reduction targets, and has been ranked by the 2018 Climate Change Performance Index as the worst performing European country.

Funding base

Mr Donohoe said State’s first green bonds “will broaden the funding base for Ireland’s debt, and in future may even allow the financing of climate-related expenditure at a lower rater of interest than other expenditures”.

Green bond issuance has topped $100 billion (€87.2bn) so far this year, with the Belgian and the French governments the two largest sovereign issuers, according to Bloomberg data.

Still, issuance will have to increase significantly in the coming months to match last year’s $173 billion record.

JP Morgan and HSBC in France had been advising the NTMA on its first green-bond sale in recent months.

The NTMA declined to comment on the size of the transaction or timing, other than to say that it is “expected to be launched and priced in the near future, subject to market conditions”.