GREEN BOND PRICINGH1IN THE PRIMARY MARKET:2023January-June 2023Report highlightsLargest semi-annual sample to date111 green bonds with combined volumeof USD124.6bnGreen bonds in both EUR and USDperformed well on all metrics in theprimary market,on average.The greenium was observed for 16 bondsin our sampleAllocations to green investors remainstable at 66%Three EU sovereigns returned to thegreen bond market and Israel priced itsdebut dealGreen bond ETF assets achieved netgrowth of 20%on the prior periodSpotlight:Quality discernment in theSLB marketAssistance ProgramClimate BondsSupported by the International Finance Corporation1.IntroductionThis is the 16th report in our pricing series,inOverall,66%of green bonds werewhich we observe how green bonds performDescription of sample H1 2023allocated to investors describingin the primary market.This report includesthemselves as having green orgreen bonds priced in the first six months ofCategoryEURUSDresponsible investment mandates.2023(H12023)SovereignマSee more on page 7Our methodology is designed to capture theSSA192The greenium was observed for 16most liquid portion of the green bond marketbondsinour sampleand is thus limited to USD and EUR bonds withCoveredN/ASee more onpage9a minimum original issue size of USD500m.AAAfter 7 and 28 days,green bonds hadDeveloped market (DM),emerging market1611tightened by more than comparable(EM)and supranational issuers (SNAT)areincluded.The full methodology is explainedBBB349indices,on average.See more on page 11on page 21.Total8724Green bond ETFs:total fund assets inBy the end of H1 2023,aligned green bondEUR and USD green bond ETFs endedvolume of USD278.8bn priced in H1 had beenSovereign green bond performance is assessedthe period at almost USD3bn,a netadded to the Climate Bonds Green Bondseparatelyin the Sovereign Green Bond Clubincrease of 20%on the prior period.Database(GBDB),33%more than the H2 2022section of this report.Sovereigns are subject to(USD209bn as of June 2023).This report coversSee more onpage 15different pricing dynamics than bonds from other45%ofthe amount recorded in the ClimateSovereign Green Bond Club:Austria,Bonds GBDB for HI that met the aboveissuer types and their performance is addressedGermany,and Italy retumed to theon an absolute basis.Israel's 2033 deal wasrequire ments,i.e.,USD124.6bn split betweenpriced in USD rather than its local currency (ILS)111 green bonds from 87 issuers,which is thepriced its debut green bond.and is included in the same sectionlargest semi-annual sample to date in termsSee more onpage 16of both the number of bonds,and volume.Report highlights:EUR was the dominant currency with 87 bondsSLB market-Is there a link betweenamounting to EUR89.9 (USD97.3bn),whileGreen bonds achieved higher bookmateriality of KPIs and primary24 qualifying USD denominated bonds had acom bined issue size of USD27.4bn.vanilla equivalents,on average.market pricing dynamics?See more on page 18See more on page 4Market developmentsEUR Corporate Credit SpreadsMarket sentiment was positive at the beginningAAABBB200of 2023 following a subdued fourth quarter but150contagion in the banking industry.Q1 sawstrong volume,in both EUR and USD,as issuers100were prompted to secure their annual fundingrequirements ahead of further inte rest rate50hikes demanded by the stubborn inflationarybackdrop.The collapse of Silicon Valley Bank(SVB)on 10 March paralysed the USD newJanuaryFebruaryMarchAprilMayJuneissue market,followed bythe EUR market as202320232023202320232023the implosion and subsequent rescue of CreditSuisse unfolded.However,the market was openUSD Corporate Credit Spreadsagain by the end of March,and a handful ofABBBVW 2029),Ahold (Ahold 2028),Stadshypotek200AB (Stadshypotek 2028(CO)),and SiemensEnergy Finance(Siemens 2026 and Siemens1502029)were able to leverage the green labelto getdeals done,with some obtaining strong pricing100dynamics in the primary market.This impacted USD corporate credit spreads.50which had started the year bytrendingdownwards in response to strong demand butchanged course in early Februaryas equityvaluations stumbled and credit concerns startedJanuaryFebruaryMarchAprilMayJune2023202320232023to materialise,reaching their highs on 15 March.20232023Green Bond Pricing in the Primary Market H1 2023 Climate Bonds Initiative