Canada’s Export Development Corporation has left nearly $1 billion in available green investment dollars on the table, after the $500 million in green bonds it offered were snapped up in less than a week.
“Priced for the very first time in Canadian currency, EDC had $500 million in bonds available with a fixed interest rate of 1.8% that would be due in 2022,” National Observer reports. But “since the end of August, Export Development Canada (EDC) has received more than $1.45 billion in private sector requests for the targeted loans, which are approved to finance companies or projects that preserve, protect, or remediate air, water, or soil, or help mitigate climate change.”
EDC Senior Portfolio Manager Nancy Kyte told the Observer there was a practical reason behind the financial ceiling on the bond offering.
“It’s not a matter of leaving unsaturated demand out there per se,” she said. “We had $500 million in assets that met the criteria of our Green Bond framework,” and “we told (investors) at the outset that the bond was going to be $500 million and it would not grow.”
She added that the arm’s-length federal credit agency had $1 billion in eligible green bond assets in place in May, offered $500 million to investors at the time, and saved the rest for later in the year.
“We’re keen to develop the market in Canada,” she said. The mismatch between the supply of assets and demand for the bonds “should send a signal to other companies that there are lots of investors out there looking for this type of product, and if you’re interested in issuing a green bond yourself, please take comfort in the fact that there is a lot of demand.”
