Mexico green bond first could jump-start market

Author: Edward Price | Published: 11 Nov 2015

Mexico’s state-owned development bank, Nacional Financiera (Nafin), has issued the country’s first green bond of $500 million, with a coupon rate of 3.41% and for a period of 5 years. Although there are strong prospects for the asset class in the country, progress will depend on its finance ministry and the birth of a secondary market.

Other markets have been encouraging green bonds in recent years. The European Commission is behind market-led green bond initiatives and China has  also been trying to grow a green bond market, albeit with a more top-down approach. Mexico appears to have decided on a European approach. "The green bond development in Mexico is very similar to what's happening in the EU, from which Latin America seems to be taking its cue," said Mike Fitzgerald, partner at  Paul Hastings.

But any market for green bonds in Mexico will still...