Green bonds: Exploring the corporate Greenium

• Autor(a) principal: Damas, Francisca Moreno
• Data de Publicação: 2021
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/24313
• topic: Alteração climática -- Climate change; Green bonds; Greenium; Financial performance; Bond pricing; Obrigações verdes; Performance financeira; Preço das obrigações

Green bonds appeared in financial markets as a way to materialize both issuers’ and investors’ “green needs”. For issuers, these assets are a way to access private capital and fulfill green investment needs and for investors, represent a way to contribute to those projects that could make a difference on the fight against climate change. Technically, green and vanilla bonds, if issued by the same issuer, share the same characteristics (besides the green use of proceeds) and therefore, should be priced the same (or similarly) in the primary market. However, that seems to not always be the case. The main goal of this study is to conclude if, financially, green bonds represent a less costly alternative for companies, over traditional bonds. In other words, we will look for a greenium in the primary market (green bonds are issued with a lower yield than vanilla bonds). To do so, we will resort to a direct matching process to match the bonds, and to statistical tests, in order to infer on the statistical significance of the yield spreads found. Based on the methods employed, we found a greenium on the groups of green and vanilla bonds (2.3 bps), and in the subgroups of EUR bonds (7.2 bps), as well as in the subgroups of 2017, 2019 and 2020 (36; 1.3; e 1.9 bps respectively). After several tests, it was possible to conclude that none of the differentials (except for 2017), is statistically significant. Thus, we cannot affirm the existence of a greenium in the corporate bond market.