October 10, 2019 / 9:01 AM / a month ago

Ireland begins sale of more green bonds, eyes low rate

DUBLIN, Oct 10 (Reuters) - Ireland began selling green bonds on Thursday in a syndicated transaction that a source said could raise between 1 billion and 1.5 billion euros at a yield well below its first ever sale of the increasingly popular category of debt last year.

Dublin mandated a syndicate of banks to tap its solitary green bond that matures in 2031, having raised 3 billion euros from its initial sale a year ago, with all funds providing capital for projects with environmental benefits.

Ireland sold that debt at a yield of 1.4 percent but with bond yields tumbling further in the last 12 months, lead bankers on the deal said books opened on Thursday at 26 basis points through mid-swaps, which implies a yield of around 0.25 percent.

A market source told Reuters on Wednesday that the debt office could raise up to 1.5 billion euros from the sale to close in on the lower range of its 14 billion to 18 billion euro bond sales target for the year.

Although green bonds make up a fraction of the overall market, global interest has soared as banks, sovereigns and companies look to tap into increasing investor appetite as calls grow for tougher and swifter steps against climate change.

Led by issuance in France and the Netherlands, a total of 8 billion euros in sovereign green bonds were issued in the second quarter, the greatest quarterly change to date, the Association for Financial Markets in Europe said last month.

The National Treasury Management Agency (NTMA) mandated BNP Paribas, Barclays, Bank of America Merrill Lynch, Danske Bank, Davy Stockbrokers and J.P. Morgan as joint lead managers on the deal. (Reporting by Padraic Halpin Editing by Gareth Jones)

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