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Citi debuts structured green bond

Citi has issued and traded its first structured green bond, distributed by UBS Global Wealth Management.

The bank said that the five-year bond provides exposure to three-month USD Libor with a floor, payable quarterly. The proceeds will fund green projects in renewable energy, energy efficiency, sustainable transportation, water quality and conservation, and green buildings as defined in Citi’s green bond framework.

“This issuance is the next step in our commitment to supporting sustainable finance and growing investor appetite in the green bond market,” said Bhaavit Agrawal, global head of rates structured notes at Citi. “The bond is a floored floating rate note and is structured to combine the benefits of a tailored approach towards risk-return with sustainability criteria.”

Citi was a co-founder of the International Capital Market Association’s (ICMA) green bond principles (GBP) in 2014 and has since had a key role in the development of the market. In January, the group announced its inaugural green bond issues as a €1 billion three-year fixed rate offering

“As sustainability and environmental, social and governance (ESG) considerations continue to be prioritised by investors, Citi will continue to offer a range of innovative investment opportunities for the full range of our investor clients around the globe,” added Lorenzo Leccesi, Citi’s EMEA head of retail cross asset solutions.

Green goals

In 2015, Citi announced a $100 billion environmental finance goal spread over 10 years to support environmental solutions and accelerate the global transition to a low-carbon economy. The group also recently announced that it will source renewable power for 100% of its global energy needs by 2020.

Both initiatives are part of Citi’s contribution to advancing the United Nations Sustainable Development Goals (SDGs). They are also key goals  of its sustainable progress strategy, which sets out Citi’s guiding principles, priorities and ambitions in environmental finance, environmental and social risk management, and the firm’s own operations and supply chain.

Green bonds were initially pioneered by the World Bank, which developed the first back in November 2008. That debut issue created the blueprint for today’s green bond market and also  defined the criteria for projects eligible for green bond support.

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