Finance
Environmental Goals Spur Demand for New Type of Bonds in Asia
- Bank of China’s new notes have outperformed broader market
- Uptake in issuance may help China meet carbon-reduction goals
Photographer: Kevin Frayer/Getty Images
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The first transition bonds in Asia sold in line with major new international guidelines have outperformed the broader credit market since they were issued earlier this month, suggesting that demand for this type of security is rising.
The notes allow issuers to fund projects which help reduce their pollution and emissions and ultimately become carbon-neutral. Proceeds from a dual-currency issuance by Bank of China Ltd.’s Hong Kong branch this month will be used to finance or refinance projects that commit to new disclosure guidelines from the International Capital Market Association.