Skip to Content
Credit Insights

Not Yet St. Patrick's Day, but Verizon Goes Green

Corporate bond market runs out of steam midweek.

St. Patrick's Day is still a month away, but Verizon Communications (BBB, stable) got an early start last week as it issued its first "green" bond. According to the International Capital Market Association, "Green Bonds enable capital-raising and investment for new and existing projects with environmental benefits." To be considered a green bond, the issuer commits to using the proceeds from the bond issue for projects that will enhance its climate or environmental profile. Currently, there are no governmental regulations that stipulate what a company must do to designate a bond issue as a green bond, but the ICMA has published Green Bond Principles 2018, which outlines its voluntary process guidelines for issuing green bonds. Typically, the issuer will solicit a second-party opinion to provide investors with its assessment as to the firm's adherence to the ICMA's four core components of the Green Bond Principles. In the case of this bond issuance from Verizon, the second-party opinion was provided by Sustainalytics, a leading independent provider of environmental, social, and corporate governance research, ratings, and analytics. The opinion can be found here:

The green bond issued by Verizon was a $1 billion, 10-year note offering that was priced at a spread of +120 basis points over Treasuries. Demand for the new notes was off the charts; Bloomberg reported that the note offering was 8 times oversubscribed (meaning that there was $8 billion of orders for the $1 billion offering). This is more than double the average oversubscription level in 2018. In the secondary market, the heightened demand immediately drove the price higher to an equivalent of +118 basis points over Treasuries, and the bonds have continued to trade in that context. One bond trader said he thought the bonds were priced about 5 basis points tighter than an equivalent non-green bond would have priced for the same maturity. Before this offering, Verizon's existing 2028 notes were also trading around +120, which means that the green bonds were priced with no new issue concession and no additional spread for the curve.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.