The World Bank and Bank of America Merrill Lynch said they will offer “green bonds” paying a first-year coupon of 3.5 percent and a floating rate after that.
The triple-A-rated bonds will provide comparable returns to other World Bank bonds and will mature in 2021, according to a statement on the website of New York-based Merrill Lynch. They will support financing of projects that meet specific criteria for low-carbon development, including alternative energy, new technologies that cut greenhouse gas emissions, reforestation, watershed management and flood protection.
“We are committed to delivering innovative capital and investment opportunities, so we are pleased that we were able to work with the World Bank on these highly rated fixed-income products,” Alastair Borthwick, co-head of global capital markets at Merrill Lynch, said in the statement.
The Washington-based World Bank has issued 37 green bonds since November 2008, including a $2.1 million bond managed by Merrill on May 24. JPMorgan Chase & Co. (JPM), Daiwa Securities Group Inc. (8601) and TD Securities Inc. were among managers for the other bonds with coupons ranging from 0.875 percent to 10 percent, according to the development bank’s Website.
The bonds will be available for Merrill Lynch Wealth Management investors “on a periodic basis,” according to the statement. The floating, three-month rate is based on U.S. dollar Libor, Merrill Lynch said.
