JPMorgan breaks 2-year green bond freeze with $7B sale

Green bond sales have surged in 2023.

JPMorgan Chase & Co. sold green bonds for the first time in over two years as global sales of the debt accelerate at a record pace.

The biggest US bank raised $7.25 billion of bonds in three parts, according to a person with knowledge of the matter. The shortest portion of the offering, a four-year security, is a $2 billion green bond that’s callable after three years, said the person, who asked not to be identified as the details are private.

Proceeds from the green tranche will be used to fund eligible green projects, added the person. Such projects could range from green buildings to renewable and clean energy, as well as sustainable transportation — like electric vehicles, according to the bank’s sustainable bond framework 2022.

JPMorgan last tapped the green bond market in August 2021 when it raised $1.25 billion, data compiled by Bloomberg shows. The bank recently posted another quarter of record net interest income and boosted its forecast for the year.

Global green bond sales are on track for the biggest year ever, with sales totaling $422.97 billion in the first three quarters of this year — a record-setting pace — data compiled by Bloomberg show.

However, US corporations — including Wall Street banks — have dialed back their sales of bonds linked to environmental, social and governance issues this year, as the price benefit for selling the debt diminishes and Republican politicians push back against investing strategies that factor in ESG.

This year, Goldman Sachs Group Inc. expects just $40 billion of ESG corporate investment-grade issuance in the US dollar market — half the amount issued by US companies last year, and just 40% of 2021 levels.

A spokesperson for JPMorgan didn’t reply to a request for comment.