Investment-grade issuers Amgen, Verizon, DTE, Mizuho price green bonds; paper mostly improves

By Cristal Cody

Tupelo, Miss., Feb. 18 – High-grade issuers stood down on Monday as volatility took center stage before issuance resumed Tuesday with over $30 billion of investment-grade bonds sold through Thursday and $2.65 billion of the supply focused on the green market.

Amgen Inc., Verizon Communications Inc., DTE Electric Co. and Mizuho Financial Group, Inc. priced green notes during the week with the paper trading mostly better in the secondary market.

Meanwhile, emerging markets high-grade issuer Korea Development Bank dropped a planned green tranche from a registered three-part bond offering on Wednesday.

The green 10-year notes were initially talked to price in the Treasuries plus 90 basis points to 95 bps area, a market source said.

The bank instead sold $1.5 billion of three- and five-year notes with proceeds slated for general operations.

Global green supply up

Sustainability-linked and green corporate bond issuance was lighter in January compared to a year ago.

In January, $5.66 billion of U.S. green corporate bonds priced, down from $7.23 billion brought in January 2021, according to Prospect News data.

Global dollar green corporate and sovereign bond supply was stronger in January with $19.16 billion of notes sold, compared to $17.22 billion of green supply in January 2021, according to the data.

S&P Global Ratings said in a February report that it expects global issuance of green, social, sustainability, and sustainability-linked bonds to surpass $1.5 trillion in 2022.

Sustainability-linked bonds are projected to be the fastest growing segment of the market, while green bonds also will post record issuance volume in 2022, S&P said.

On Monday, the Public Sector Pension Investment Board announced the publication of its green bond framework, noting green bonds will provide a new tool for the board and “enable PSP Investments to answer increasing investor demand for sustainable debt products.”

Amgen, Verizon, DTE improve

Green corporate issues sold over the week were trading mostly tighter by Friday, according to market sources.

Amgen’s green issue improved over 5 bps.

The company sold $4 billion of notes (Baa1/A-/BBB+) in four tranches on Thursday, including a $750 million green tranche of 3% senior notes due Feb. 22, 2029 at 99.687 to yield 3.05%, or at a spread of Treasuries plus 110 bps.

Initial price talk was at the Treasuries plus 135 bps area.

Amgen’s bonds came in about 5 bps at the front end of the maturities to over 10 bps on the 30- and 40-year tranches, sources said.

The green tranche firmed 6 bps to 104 bps bid soon after pricing and was later seen Friday at 105 bps bid, 102 bps offered.

The Thousand Oaks, Calif., manufacturer and marketer of human therapeutics plans to use the proceeds from the green notes for eligible projects.

Verizon Communications priced its fourth green bond offering since 2019 when it sold $1 billion of 3.875% green notes due due March 1, 2052 at 98.949 and a spread of 155 bps over Treasuries on Wednesday.

The issue priced tighter than talk in the 165 bps to 170 bps area over Treasuries.

Verizon’s 3.875% notes were trading 3 bps to 4 bps tighter on the offered side in the secondary market by the end of the week, market sources reported.

The green issue was quoted at 156 bps bid, 152 bps offered on Friday.

Proceeds will be used for financing or refinancing eligible green investments that include include new and existing investments made by Verizon from Dec. 1, 2021 through the maturity of the notes.

Verizon also on Monday reported the final allocation of its third green bond that was issued in September 2021, with $991 million of the proceeds going toward renewable energy purchase agreements to achieve a goal of net zero emissions in its operations by 2035.

The New York-based telecommunications company was the first U.S. telecom company to issue a green bond when it tapped the market in 2019.

DTE Electric’s green tranche that priced as part of a $900 million two-part offering of general and refunding mortgage bonds (Aa3/A/A+) on Wednesday also improved in secondary trading.

The issuer sold $400 million of 3.65% series B green bonds due March 1, 2052 at 99.385 to yield 3.684%, or 130 bps over Treasuries.

Talk was in the Treasuries plus 145 bps area.

DTE Electric’s green tranche was over 2 points higher and trading better than 102.25 bid by late Friday afternoon and quoted tighter by spread at 129 bps bid, sources said.

The Allentown, Pa.-based electric company has the proceeds pegged for eligible green expenditures such as renewable energy and energy efficiency.

Mizuho softens

The green market also saw financial issuance from Mizuho Financial Group, which priced $1.85 billion of notes (A1/A-) in three tranches, including one tranche of green notes, on Wednesday.

In the green tranche, Mizuho sold $500 million of 3.261% senior callable fixed-to-fixed reset rate notes due May 22, 2030 at par to yield 3.261%, or a spread of 125 bps over Treasuries.

The notes came tighter than talk in the Treasuries plus 135 bps area.

Mizuho’s green tranche widened 10 bps to 135 bps bid on Friday, a source said.

The Tokyo-based financial institution plans to use the proceeds for eligible green projects.

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