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Corporate green bond market set to double to USD20bn in 2014, says S&P

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Green bonds, which raise funding for environmentally beneficial investments, are set to grow dramatically, according to a report published by Standard & Poor's Ratings Services.

This growth will be driven by the financing needs of issuers and by investors increasingly allocating capital to socially responsible and environmentally sustainable investments,
 
According to the report, "The Greening Of The Corporate Bond Market", the corporate green bond market, currently at USD10.4 billion, is gathering convincing impetus and will grow to around USD20 billion globally, double the size of the total green market in 2013.
 
Corporate green bond issuance is accelerating, not only because this aids diversification of investor pools for issuers, but also because of investors' growing interest in implementing environmental, social, and governance goals.
 
So far, corporate green bonds have mostly been issued in Europe, with investment-grade ratings generally of 'A+' or 'A'.
 
Michael Wilkins, author of the report, says: "As the market continues to develop, smaller environmental projects may be able to attract financing by combining into larger investment offerings that could make them more suitable to larger investors. We think it likely that the next stage of market evolution will see structuring of bonds to enhance credit support and a move to finance environmental projects away from the issuer's balance sheet."

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