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BofA Merrill Lynch Global Research launches Green Bond index
By Lisa Kerner
Charlotte, N.C., Nov. 3 – BofA Merrill Lynch Global Research announced it launched the BofA Merrill Lynch Green Bond index (ticker: “GREN”) on Thursday.
The index is designed to track the performance of debt issued by quasi-governments and corporations. Proceeds are to be used solely for projects and activities that promote climate or other environmental sustainability purposes, according to a news release.
The index excludes securitized and collateralized securities. Qualifying securities must have an investment-grade rating (based on an average of Moody’s, Standard & Poor’s and Fitch), at least 18 months to final maturity at the time of issuance, at least one month remaining term to final maturity as of the rebalancing date and a fixed coupon schedule, the release stated.
Additionally, securities must be denominated in specified developed market and emerging market currencies.
The index has daily historical data back to a chosen inception date of Dec. 31, 2010.
Key statistics from the index as of Sept. 30 include a market value of $32.3 billion, 29 issuers, 51 bonds, a 1.4% yield, an average duration of 5.39 years and an average rating of AA2.
“The first green bond was issued in 2007, but through 2012, additional issuance was slow,” Phil Galdi, head of BofA Merrill Lynch Global Bond Index Research, said in the news release.
“However, in 2013 more green bonds were issued than in the previous six years combined, and that volume has already more than doubled in 2014. Currently, there are $31 billion in qualifying green bonds included in the index, but that may just be the tip of the iceberg.”
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