Back to Strategies
🌱

Green Bond Anchoring & Distribution

DFI anchors green bond issuance, provides credit enhancement, and distributes to investors.

Green & Infrastructure
Complexity
Intermediate
Deal Size
$50M - $1.0B
Typical Tenor
7-10 years
Scalability
Medium
#green-finance#esg#bonds#anchor#infrastructure
Mini Map

Flow Types

Cash
Securities
Guarantee
Interest
Principal

Transaction Timeline

Phase 1: Structuring & Anchor(1-3 months)

DFI commits anchor investment and any credit enhancement.

Use Cases

  • •Catalyze green bond markets in emerging economies
  • •Provide credit enhancement for sub-investment-grade issuers
  • •Signal to investors and build orderbook
  • •Support renewable energy and climate projects

Problem Solved

Makes green bond issuance viable for issuers that lack market access or credit rating.

Revenue Calculator

Model deal economics

$200M
$50M$1.0B
114 bps
5 bps200 bps
10 bps
50 bps

Projected Revenue

Gross Carry Income$1,140,000
Funding Cost($100,000)
Net Carry$1,040,000
Upfront Fees$1,000,000
Total Revenue$2,040,000
Annualized Return
204.0 bps
If Repeated Annually
$4,080,000

Revenue Sources

Carry Income

New Issue Premium15-40 bps

Bonds often price at slight discount to secondary

Upfront
Coupon Income100-300 bps

Interest income on held bonds

Annual

Fee Income

Arrangement FeeOne-time
25-75 bps

Fee for structuring and anchoring

Guarantee Fee
50-100 bps

Fee for credit enhancement if provided

Regulatory Checkpoints

Green Bond PrinciplesICMA GBP

Compliance with use of proceeds and reporting requirements.

Capital TreatmentBasel III

Standard corporate exposure treatment applies.

Risk Flags

Credit RiskMedium

Issuer may default on bond payments.

Mitigation:Credit analysis, credit enhancement, diversification.
Greenwashing RiskMedium

Funds not used for genuine green projects.

Mitigation:Independent verification, use of proceeds monitoring.