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Honda joins Ford by selling green bonds in EV push

Honda’s motobike For the first time Motor Co. raised $2.75 billion in bonds aimed at benefiting the environment, joining its competitors Ford Motor Co. in tapping the booming world of sustainable finance to finance the transition to tram.

According to a person with knowledge of the matter, the Tokyo-based automaker is selling the dollar-denominated green bond in three parts. The longest part of the offering, 10-year securities, is expected to yield 1.12 percentage points on Treasuries after the level initially discussed was 1.4 percentage points, one person said. asked to remain anonymous. .

It marks the company’s first green bond deal, a company spokesman said last week. The offering is one of the largest green bonds issued by a corporation in the US premium market, according to Bloomberg data.

Honda intends to allocate an amount equal to the net proceeds from the issuance of the banknotes to a new set of eligible green projects including manufacturing Electric Car, solar and wind power along with investments in recycling used vehicle parts, according to a bond prospectus. Ford sold its first $2.5 billion in green bonds in November as it turned to electric vehicles, the largest offering ever from an American corporation.

Companies and governments are flocking to the green bond market to fund all sorts of eco-friendly initiatives. Global sales of green bonds hit a record $513 billion last year, according to data compiled by Bloomberg. The Climate Bonds Initiative estimates annual sales could hit a new high of $900 billion to US dollarsfirst trillion by the end of this year and to $5 trillion by 2025.

According to Stephen Liberatore, head of ESG and Impact for Global Fixed Income at Nuveen Investment Management, Nuveen Investment Management, Nuveen Investment Management, has 1.3k supervision. billion dollars globally. Liberatore, which manages about $18 billion in sustainable assets, including green, social and sustainable bonds, hopes more automakers will follow.

“As someone who is investing in this space, the opportunity to go deeper and broader is a really big positive, especially as an investor,” Liberatore said in a video interview on Thursday. active total-return portfolio management,” Liberatore said in a video interview Thursday. “These are the kinds of things that we really want to see.”

Honda, which is stopping the export of cars and motorcycle to Russia, being the first of JapanAutomakers have publicly announced that they will phase out the sale of gasoline-powered cars altogether. The company has set its sights on 2040, giving newly minted CEO Toshihiro Mibe a career opportunity to put his stamp on a company that can trace its lineage from 84 years ago.

JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Morgan Stanley is managing the bond sale, the person said.

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