Rare Yen Bond Deal With Clear ‘Greenium’ Shows Strong ESG Demand

A green bond priced in a yen debt deal Wednesday had a lower spread than its nearly identical regular note sold at the same time, in an unusually clear example of the lower borrowing costs issuers get for selling ESG securities.

Hiroshima Prefecture sold 10-year green bonds with a spread of 23 basis points over government notes, 2 basis points lower than regular debt in the same offering. That may be the first time for a Japanese debt deal to show such a clear greenium, according to Nomura Securities Co., one of the underwriters.