Austria Plans Debut Green Bond in 2022 With Eye on Yields
(Bloomberg) -- Austria plans to issue its first-ever green bond next year, joining the flock of nations looking to issue debt tailored for investors with an environmentally conscious mandate.
The euro-area member state will hold an initial sale in the first three months of 2022, though it has yet to decide on technical details including volume and maturity, Finance Minister Gernot Bluemel said in an interview in Alpbach, Austria.
Austria is giving in to the lure of green notes amid a global surge in issuance, even as its regular debt already attracts funds from green-focused investors.
One potential benefit for Austria could be to replicate the tighter pricing Germany achieved on its green notes compared with regular debt instruments, Bluemel said. The Viennese Treasury hasn’t decided whether to follow its northern neighbor in making its green bonds convertible to standard instruments.
“It has to be a certain amount because otherwise it wouldn’t make sense,” Bluemel said. “We will evaluate closely the yield and how it’s accepted on the market.”
The nation’s Treasury usually publishes its annual funding plan in December. It recently held its first Treasury bill auction as part of efforts to increase the share of short-term instruments in its debt mix.
According to Bluemel, next year’s budget deficit will be “slightly higher” than the 4.3% projected earlier this year, but still narrower than the 8.4% planned for 2021. The exact shortfall will also depend on negotiations, including about a new tax on carbon-dioxide emissions.
“The budget will be the first to mark a normalization phase after the coronavirus pandemic,” Bluemel said. “It will set a clear path toward reducing emergency grants and loans introduced during the pandemic.”
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