Connecticut Green Bank’s lower-dollar denomination bond received strong support from individual buyers in Connecticut and across the country as well as from institutional buyers
Hartford, CT (April 23, 2021) – In celebration of the 51st Earth Day, the Connecticut Green Bank issued its second Green Liberty Bonds to retail and institutional investors, and sold out of nearly $25 million in bonds over two days. This builds upon a successful, award-winning 2020 issuance which sold nearly $17 million of bonds last July. With nearly $100 million in orders, demand this year was again greater than the supply of bonds could satisfy, showing the high-level of interest in supporting investment to confront climate change in Connecticut.
Retail investors were given priority during a one-day retail order period on Wednesday, April 21. Total retail orders received during this order period surpassed $20 million. With first priority given to Connecticut citizen investors, their orders for nearly $12 million of bonds were filled before approximately $9 million from national orders. Institutional orders topped $77 million.
“The demand for the Earth Day 2021 issuance of the Green Liberty Bonds was so strong, that we had nearly four times as much demand as we had available. We saw incredible demand from retail investors in Connecticut and across the country, and enthusiastic institutional investors seeking to invest in confronting climate change in Connecticut,” said Bryan Garcia, President and CEO of the Green Bank.
Individuals accounted for 57% of the retail orders with the balance from professionally managed retail accounts such as private wealth managers and bank trusts.
Institutional investors were able to place orders on April 22, and there was strong interest from a variety of traditional municipal investors and Environmental, Social, and Governance (ESG) investors attracted by the issuance’s strong climate bonds certification standards. The overall interest cost dropped to 2.42% from the 2.61% achieved for the inaugural bonds issued last July, notwithstanding a significant rise in longer term interest rates.
“In two years, the Green Bank has issued more than $80 million in verified climate bonds to support residential solar PV and energy efficiency in Connecticut. The overwhelming response by investors to our latest bond offering as well as the pricing achieved signifies broad acceptance of the Connecticut Green Bank as an issuer,” noted Bert Hunter, the Green Bank’s Chief Investment Officer.
The use of proceeds from this issuance supports incentives for nearly 7,000 households and 60 megawatts of residential solar photovoltaic systems, totaling nearly $220 million of investment in projects in 165 cities and towns across the state, which created over 2,100 jobs.
The Green Liberty Bonds were created in honor of the 50th anniversary of Earth Day – a type of green bond whose proceeds are used to invest in projects that confront climate change in Connecticut. Modelled after the Series-E War Bonds of the 1940s, the bonds must be able to be purchased by everyday citizens through lower-dollar denominations (no more than $1,000), enabling them to invest in green projects in their community and to save for the planet.
To offer the Green Liberty Bonds, the Green Bank worked with Stifel, Nicolaus & Company, Inc. as lead underwriter, Ramirez & Co., Inc. as co-underwriter, Shipman & Goodwin LLP as bond counsel, Lamont Financial Services Corporation as financial advisor, and Bank of New York Mellon Trust Company, N.A. as trustee. The Green Liberty Bonds, state supported using a special capital reserve fund, received an A rating from Standard and Poor’s. They were labeled as “Certified Climate Bonds” by the Climate Bonds Initiative, and compliance of the bond’s issuance with the Climate Bonds Standards was verified by Kestrel Verifiers. Support from the staffs of the Office of the State Treasurer and of the Office of Policy and Management was also instrumental.
“The Green Liberty Bonds were a huge success with the investor community. Investors liked the credit and were also attracted by the opportunity to invest in Certified Climate Bonds,” said Eric McKean, Managing Director of Stifel.
Encouraged by these first two issuances, the Green Bank anticipates offering Green Liberty Bonds annually around Earth Day. To stay informed about future issuances, please sign up for notifications at www.greenlibertybonds.com.
This press release does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including Green Liberty Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to Green Liberty Bonds will be made solely by means of the Preliminary Official Statement and Official Statement, which will describe the actual terms and conditions of the Green Liberty Bonds. The information provided is subject in all respects to the information presented in the complete Preliminary Official Statement prepared in connection with Green Liberty Bonds. Any investment decisions regarding any of the Green Liberty Bonds should only be made after a careful review of the complete Preliminary Official Statement.