For credit purposes the bonds are standard Massachusetts State Government Bonds. The difference is that the State is guaranteeing to use the proceeds to finance “environmentally beneficial” projects.

It’s a similar approach to the World Bank Green Bonds, except there has been no third party review of the inclusion criteria – and the proceeds are not all for investments related to addressing climate change, so it wouldn’t win Climate Bond certification.

The projects are in designed in four categories:

• Clean Water and Drinking Water Projects.
• Energy Efficiency and Conservation Projects in State Buildings.
• Land Acquisition, Open Space Protection and Environmental Remediation Projects.
• River Revitalization and Preservation and Habitat Restoration Projects.

Rating is AA+ Fitch / Aa1 Moody’s. Lead manager is Bank of America Merrill Lynch. Full details are available on the Massachusetts Investor web site.

Tesla had planned to raise $450m through convertible bonds, but this was raised to $600m after strong demand from investors. That demand allowed Tesla to drop what was going to be a 2-2.5% coupon down to 1.5%-2%. Investors were certainly bullish on the notes.

Over 200 investors participated in a group investor call and Tesla management also held a number of one-to-one investor meetings. We’re not sure yet who the main investors were (although we do know that one of them was the company’s co-founder and CEO Elon Musk) but unlike many convertible bond deals, buyers were primarily long-only funds (few hedge funds).

Approximately $450mn of the money raised will go towards repay a $452mn loan from the Federal government through the  DOE’s Advanced Technology Vehicles Manufacturing loan guarantee scheme.

Would the Tesla bonds qualify for Climate Bonds certification? Well, electric vehicle (EV) technology will be eligible, although we are still working on details of inclusion definitions. At this stage, we don’t see any problem with convertible bonds for pureplay companies like Tesla; but if it wasn’t pureplay then we’d have to take a deeper look. In our 2012 Bonds and Climate Change report, we didn’t find any bonds solely linked to EVs, so (as far as we can tell) this is a first!

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Last minute reminder: Join us Thursday this week a webinar on
Green Sukuk – why, what, how. Financing renewable energy in the Islamic World – Click for more info

23 May 2013; one hour. 5pm Dubai time / 3pm CET / 2pm BST / 9am EDT

To join the webinar click: https://www3.gotomeeting.com/register/117586174

Green Sukuk – why, what, how
Financing renewable energy in the Islamic World

From the Green Sukuk Working Group: Gulf Bond and Sukuk Council / Climate Bonds Initiative / Clean Energy Business Council MENA

Hosted by The Sustainable Investment Professional Certification (SIPC) @Concordia University in Montreal, and Sustainable Financial Markets

Sukuk are the Islamic equivalent of bonds. The sukuk market is well-suited to channel the growing global pool of Shari’ah-compliant capital to fund renewable energy and energy efficiency projects.

The Green Sukuk Working Group has been set up to facilitate and promote Islamic finance products which are compliant with a low-carbon economy.

Topics to be covered:

- An introduction to Green Sukuk
- Market demand
- Potential Green Sukuk architecture
- Investment opportunities

Presenters

Michael Grifferty – President, Gulf Bond and Sukuk Association
The GBSA is the regional trade association representing the Arabian Gulf bond and sukuk market. Michael has 20 years experience in debt markets, including as a US Dept of Treasury advisor for sovereign debt management and a consultant to the IMF.

Jeremy Crane, COO, Adenium Energy Capital
Dubai-based Adenium invests in the clean energy sector, especially solar. Jeremy has designed, built and operated renewable power facilities, as well as other infrastructure, around the world.

Paul Guire, Managing Director, ICAP Deutschland
ICAP is the world’s largest interdealer broker. Paul’s interest in renewable energy and islamic finance, and his access to day to day secondary market Sukuk pricing, puts him in a good position to comment on prospects for this market.

Sean Kidney, CEO, Climate Bonds Initiative
The Climate Bonds Initiative is an investor-focused not-for-profit working to mobilize debt capital markets to fund a rapid, global transition to a low-carbon economy.

23 May 2013; one hour
5pm Dubai time / 3pm CET / 2pm BST / 9am EDT

To join the webinar go to https://www3.gotomeeting.com/register/117586174

If you can’t make next week let us know; we may do a second webinar later in the year.

Invite you to a seminar

Financing the energy transition in France: What role for Climate Bonds?

Paris | Tuesday 4 June 2013, 14:30 – 18:30

Caisse des Dépôts | 15, quai Anatole France 75007 Paris

The mobilization of private finance will be a key factor in achieving a low-carbon energy transition in France. Bonds will have to be a key part of the mix of capital instruments. What are the next steps?

Programme

• Opening address: Pierre Ducret, CEO, CDC Climat
• Introduction: Helen Mountford, Deputy Director, Environment Directorate, OECD

Round Table “Are Climate Bonds part of the response to the challenges of financing the energy transition?”

Moderator: Benoît Leguet, Managing Director, Head of Research, CDC Climat

Speakers:

• Emmanuel Legrand, Deputy director, Investment and Projects, CDC Climat
• Dominique Dron, in charge of writing the French white paper on financing the ecological transition
• Chris Knowles, Head of Climate Change & Environment Division, European Investment Bank – EIB
• Rosalind Wall, Head of Green Deal Finance, British Department of Energy and Climate Change
• One speaker from the OECD

Round Table “What are the necessary conditions to facilitate the involvement of financial players?”

Moderator: Hervé Allègre, Managing Director, Head of Investment and Projects, CDC Climat

Speakers:

• Sean Kidney, CEO, Climate Bonds Initiative
• Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole-CIB
• Vincent Damas, Head of Investment Rules and Finance, CNP Assurances
• Paul Davies, Head of Structuring for the Green Deal Finance Co., PwC
• One asset manager

Conclusion Jean Pisani-Ferry, Director, Commissariat général à la stratégie et à la prospective

The conference will be simultaneously translated in French and English.

RSVP: jessica.lecolas@cdcclimat.com

If you’ve already received a confirmation for your registration, you don’t need necessary to register again.

—————–

The Climate Bonds Initiative | CDC Climat (Group Caisse des Dépôts)

sous le patronage de Paris EuroPlace

avons le plaisir de vous convier à la conférence :

Financement de la transition énergétique en France : Quels enjeux ? Quelles perspectives pour les Climate Bonds ?

le mardi 4 juin 2013 de 14h30 à 18h30

au siège de la Caisse des Dépôts (15, quai Anatole France 75007 Paris – salle Solférino)

Cette conférence abordera la question du rôle que les obligations vertes, ou Climate Bonds, pourraient jouer dans le financement de la transition vers une économie bas-carbone en France. Elle placera ce nouvel outil de financement dans le contexte plus large de la transition énergétique et des conditions de son succès. Les exemples européens (avec la BEI) et britanniques (Green Deal) seront le point de départ pour envisager leur déploiement en France.

Programme

• Allocution de bienvenue Pierre Ducret, Président, CDC Climat
• Introduction : Helen Mountford, Directrice adjointe de l’Environnement, OCDE

Table-ronde « Les défis du financement de la transition énergétique trouvent-ils leurs réponses dans les Climate bonds ? »

Modérateur : Benoît Leguet, Directeur de la recherche, CDC Climat

Intervenants :

• Emmanuel Legrand, Directeur adjoint des investissements et projets, CDC Climat
• Dominique Dron, Chargée du livre blanc sur le financement de la transition écologique
• Chris Knowles, Chef de la division Changement climatique, Banque Européenne d’Investissement – BEI
• Rosalind Wall, Directrice des Finances du Green Deal, Ministère britannique de l’Energie et du Changement Climatique
• Un(e) représentant(e) de l’OCDE

Table-ronde « Quelles conditions pour permettre l’engagement des acteurs financiers ? »

Modérateur : Hervé Allègre, Directeur des investissements et projets, CDC Climat

Intervenants :

• Sean Kidney, Directeur, Climate Bonds Initiative
• Tanguy Claquin, Responsable du Sustainable Banking, Crédit Agricole-CIB
• Vincent Damas, Directeur des règles d’investissement et du financement, CNP Assurances
• Paul Davies, Responsable du montage de la Green Deal Finance Co., PwC
• Un(e) gestionnaire d’actifs

Conclusion Jean Pisani-Ferry, Commissaire général, Commissariat général à la stratégie et à la prospective

RSVP: jessica.lecolas@cdcclimat.com

Interesting to see Ashley Schulten from BlackRock ($3.8 trillion under management) come out and say in last week’s Institutional Investor that “The market is searching for the Good Housekeeping seal of approval for what constitutes green bonds.” Absolutely.

Environmental Finance this week broke the story of the first certification under the Climate Bond Standard (we were going to announce it eventually, but cat’s out of the bag now). The wind bond, which, as the article said “is set to be issued by an as-yet-unidentified bank later this year”, was verified by DNV Kema.

Had a chance to catch up with folks at new NY State Green Bank recently – they’re recruiting a Bank President who would report to CEO Richard Kauffman. Kauffman seems to understand very well how to mobilize the private capital NY needs, and we’re expecting great things; being Bank President there would be a very exciting job, so if you know someone that fits the bill …

This is welcome news.

Don’t get me wrong – we need good and strong regulation to head off the absurd opacity and obfuscating complexity that contributed to the financial crash. But pure and simple securitizations are not what sank western economies; in fact they helped democratize finance and drive down the cost of capital for 40 years.

Both the IMF in its Global Financial Stability Report and some folks in the OECD have been talking about the need to support securitization to get banks lending again in the midst of recapitalization. The European Commission’s recent consultation paper on long-term finance raises the issue as well – good on them.

Securitization allows banks to focus on setting up loans rather than holding on to them long-term – which Basel III makes more difficult. By being able to quickly refinance through loan securitization they more quickly recycle their now smaller lending allocations – that velocity still allows more loans to be made.

At the moment, banks have hacked back lending to small-to-medium sized enterprise (SMEs). As WSJ says, without financing, these companies can’t grow: can’t hire employees, can’t invest in new projects. This is a serious problem in Europe, especially in the southern countries facing multi-year recessions and unemployment at depression levels.

The ECB wants asset-backed securities to be a sizeable source of bank financing that will encourage lending to SMEs. The WSJ reports that Draghi also alluded to the ongoing talk about European Investment Bank being used as a vehicle to supply credit to SMEs.

The Climate Bonds Initiative has been arguing that the EU (and other) governments should further listen to the OECD and bias their support for securitization towards green growth measures, for instance loans for SME energy efficiency measures and for green buildings. This has the benefit of supporting stimulatory lending in a jobs-intensive sector while also helping meet ambitious emission reduction goals.

Reaching emission reduction targets is a huge challenge; if we’re going to work to steer private capital in areas of public policy priority – the essence of the stimulatory task ahead of us – we need to have a constant and recurring bias to also addressing the over-arching challenge of climate change.

Fiduciary duty is the term used to describe a pension fund trustee’s responsibility to act in the best interests of the person whose assets they are in charge of. The boundaries of that responsibility have usually been defined as being limited to stock (and bond) picking decisions; but such an approach can be limiting in the face of systemic threats like the financial crisis – or climate change.

Does fiduciary duty mean that trustees need to pursue all possible avenues – including perhaps working collaboratively with other funds – in acting in the best interests of pension fund beneficiaries? Or should they keep their heads down and only consider relative returns of assets.

International Trade Union Council General Secretary Sharan Burrow is influential among the large cohort of pension fund trustees drawn from unions – and she has strong views on the correct meaning of fiduciary duty and on the responsiblities of pension fund trustees.

Join us tomorrow Thurs 8 May for a webinar – Sharan Burrow in conversation with Keith L. Johnson on: “Pushing the Reset Button for Pension Fund Investment“. 

The webinar is presented by Climate Bonds Initiative with Sustainable Financial Markets & the Sustainable Investment Professional Certification.

Sharan Burrow is the first female leader of the world’s largest international trade union organization, the ITUC. Before her election as General Secretary in 2010, she was President of the ITUC from its foundation in 2006 and had previously been the first female President of the (ICFTU), a forerunner institution of the ITUC. She is the first woman to have held any of these positions.

Keith L. Johnson is a director of Sustainable Financial Markets and a member of the International Corporate Governance Network‘s Shareholder Responsibilities Committee. He is head of the Institutional Investor Services Group at legal firm Reinhart Boerner Van Deuren s.c., where he represents pension funds and institutional investors globally on fiduciary, investment, corporate governance and securities litigation matters.

Webinar Date: Thursday, May 9th

Time: 11-11:45am EDT / 4pm London / 7pm Dubai

Register for the webinar at: https://www3.gotomeeting.com/register/431539830

There have been a number of UK conversations about such bonds for refinancing in the wake of increased, Feed-In Tariff-induced solar investment in recent years. We appreciate that one swallow does not a summer make, but we do expect to see more over the coming year.

The Touwsrivier facility will apparently be the largest CPV plant in the Western world. It’s scheduled for completion by June 2014.