The supply of government green bonds in the euro area will see a strong acceleration in the second quarter of 2022 also because there has been strong interest from investors, willing to receive a lower yield for owning a green asset.
A study says so dthe Intesa San Paolo which provides for an offer of government green bonds of the euro area during this year up to 83 billion euros, including 30 billion of issues by the European Union relating to the NGEU programme, after the 5 billion issued in the first three months of this year.
As for specifically Italy, the guidelines for 2022 herald the reopening of the BTP 04/2045 and the issue of a new green bond probably with a shorter duration.
Lots of interest from real money investors
On the markets - says the study - in the last few weeks of February different impacts were noted on the performance of green government bonds in the euro area.
Particularly the green BTP it turned out more defensive compared to a conventional BTP during the risk-off phase and the Z-spread differential decreased from -5 to -8 bp, says the study, and it was also found that with the increase in the 10-year BTP-Bund spread, the differential has decreased.
There was also a different behavior of investors in this sector: the green BTP benefited from a real money investor base, characterized by a long-term investment perspective (about 20% of the total placed on the primary market), and specialized investors defined as ESG (more than 50% of the total), sensitive to the green component of the stock.
Expected offer in sharp acceleration in 2022
According to our estimates, the supply of euro area government green bonds for 2022 is expected
reach 83 billion euros, including 30 billion of emissions from the European Union
regarding the NGEU programme, says the study.
La Germany announced, in the annual funding plan published in December, that it intends to place 12,5 billion of Green Federal Securities, in line with 2021, and to issue a new security with a maturity of 10/2027 on June 28th. There France declared eligible expenses of 15 billion for projects aimed at environmental protection and improvement equal to the amount allocated in 2021. The AFT reopened the OAT green 06/2044 in January for 2.8 billion euros and plans to further reopen during the year. In addition, France will syndicate a new type of green issue linked to inflation with a 10-15 year maturity.
La Spain placed 1.2 billion of the 07/2042 bond in February and will carry out further reopenings during 2022. The eligible expenditure for 2021 amounted to 13.5 billion, of which 5 billion financed through the first issue, therefore the remainder can be allocated in 2022. The Belgium announced in the annual funding plan that it will issue a new green bond with a term yet to be defined. Finally, the entry of new government issuers is expected, such as Austria which expects to place a green bond in the second quarter and Greece in the second half.
2021 ended with government issues in the euro area for around 50 billion euros and currently the outstanding amount has reached 120 billion.
Despite this the percentage of the outstanding amount on the total medium/long-term debt per country remains very low. France has a percentage of outstanding green debt of the total equal to 2.25%. Ireland and the Netherlands hold the highest percentage at 3% while Italy 0.65%
