ESG finance: how about a company’s second green bond?

08 March 2021

Dr Arthur KrebbersHead of Corporate Climate and ESG Capital Markets

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While inaugural green bonds attract most of the limelight, follow-on issuances should not be forgotten. They highlight to what extent a company has truly committed to the asset class by becoming a recurring issuer.
How does a company’s second green bond compare to its first? Our analysis suggests it’s “more of the same”.


In terms of tenor, second green bonds resemble the prior offering. 60% of firms end-up with a similar tenor. This highlights that “greenness” doesn’t fundamentally affect a firm’s debt duration decisions, which is driven by corporate finance factors such as asset-liability matching.

 Difference in tenor of 1st and 2nd green bond- Analysis by #of corporates

  % of Corporates
No change 60%
2nd Green Bond longer in tenor 20%
2nd Green Bond smaller in tenor 20%
Grand total 100%

Source: NatWest Markets data


Similarly, second green bonds tend also not to materially differ in size compared to the first green bond. The average sizes of the first and second corporate green bonds in our sample are €280 million and €265 million equivalent respectively.

Average size of 1st green bond and 2nd green bond

  EUR million
1st Green Bond 280
2nd Green Bond 265

Source: NatWest Markets data


In terms of currency, there’s also rarely much difference. 95% of issuers in our sample returned to the same market for their second green bond offering.

Difference in currency of 1st and 2nd green bond- Analysis by #of corporates

Currency % of corporates
Different currency market 5%
Same currency market 95%
Grand total  100%

Source: NatWest Markets data

We see these results as encouraging. It suggests companies try to build a relatively liquid green bond curve within their currency market of choice and are able to identify enough assets to do so. This allows them to benefit from possible “green halo” effects (i.e. potential outperformance of inaugural green bond) as well as develop closer relationships with a targeted body of ESG1 investors.
We’ve also found that they’re looking to follow up with a second green issuance with an ever increasing frequency: firms issuing their inaugural trade in 2013 waited on average around 1.9 years before returning to the market. For those who made their debut last year, it was only four months.

Average number of days between 1st and 2nd green bond issuance

Source: NatWest Markets data
Green bond issuers are in more of a hurry today, and that clearly is a good thing.
Thank you to Saakshi Arora for her excellent research assistance

Analysis notes:

  • Analysis is done on the basis of 196 global corporates which have issued at least two green bonds in public format. 37% corporates are from China, 28% from Europe, 14% each from Japan and North America and 7% from other countries
  • If a company issued a multiple tranche green bond, average size and average tenor is taken into consideration
  • For hybrid/perpetual bonds, tenor is assessed by call date
  • Rating is based on an effective rating by Moody’s, S&P and Fitch
1 ESG Environmental, Social & Governance

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