JPMorgan returns to green bond market for first time in two years

NEW YORK – JPMorgan Chase & Co has sold green bonds for the first time since August 2021 as global sales of the debt accelerate at a record pace. 

The biggest US bank raised US$7.25 billion (S$9.9 billion) of bonds in three parts, according to a person with knowledge of the matter.

The shortest portion of the offering, a four-year security, is a US$2 billion green bond that is callable after three years, said the person, who asked not to be identified as the details are private.

Proceeds from the green tranche will be used to fund eligible green projects. Such projects could range from green buildings to renewable and clean energy, as well as sustainable transportation – like electric vehicles, according to the bank’s sustainable bond framework 2022. 

JPMorgan last tapped the green bond market in August 2021 when it raised US$1.25 billion, data compiled by Bloomberg shows. The bank recently posted another quarter of record net interest income and boosted its forecast for 2023. 

Global green bond sales are on track for the biggest year ever, with sales totalling US$422.97 billion in the first three quarters of 2023 – a record-setting pace.

However, United States corporations – including Wall Street banks – have dialled back their sales of bonds linked to environmental, social and governance (ESG) issues in 2023, as the price benefit for selling the debt diminishes and Republican politicians push back against investing strategies that factor in ESG. 

This year, Goldman Sachs Group expects just US$40 billion of ESG corporate investment-grade issuance in the US dollar market – half the amount issued by US companies in 2022 and just 40 per cent of 2021 levels.

A spokesperson for JPMorgan did not reply to a request for comment. BLOOMBERG