T. Rowe Says Green Bonds Are Becoming Less Appealing for US Issuers
- Matt Lawton sees a challenging backdrop for borrowers in 2025
- Sees large untapped funding potential within the blue economy
Corporate issuance of ESG-linked bonds this year through Dec. 6 — at $27.2 billion — is already the least since 2019.
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Issuance of bonds meant to benefit the environment will likely remain muted in the US because companies are no longer getting a material price advantage for selling such debt, according to T. Rowe Price Group Inc.’s Matt Lawton.
The so-called greenium, which measures the spread of green bonds to non-green bonds from the same issuer, is now ranging between zero to 1 basis point on average for corporations, which isn’t “economically appealing for an issuer,” he said. Sovereigns are getting about 7 basis points on average, he added.