Trading in City of Moscow green bonds begins on Moscow Exchange
On 27 May 2021, Moscow Exchange launched trading in the first issue of City of Moscow green bonds.
Deputy Chief of the Executive Office of the Mayor and Government of Moscow Maria Bagreeva and Moscow Exchange Managing Director for Issuer and Government Relations Vladimir Gusakov took part in a ceremony marking the start of trading of Moscow bonds.
Investors were offered the 74th internal bond issue of the City of Moscow for RUB 70 billion with a 7-year maturity. The coupon rate is 7.38% per annum. The bond ticker is RU000A1033Z8.
Moscow Exchange has included the 74th Moscow City bond issue in the Level 1 List and the Sustainability Sector. According to an opinion provided by Expert RA rating agency, the bond issue complies with the Green Bond Principles (GBP) of the International Capital Market Association (ICMA). It also meets the Guidelines for the Promotion of Green Investments in the Russian Federation, developed by VEB.RF.
Maria Bagreeva, Deputy Chief of the Executive Office of the Mayor and Government of Moscow, said:
"Today there is substantial demand in international markets for sustainable development financing instruments, and green bonds are one such instrument. Moscow is implementing a very large number of green projects as we strive to ensure the environmental situation in Moscow remains strong and to make Moscow liveable for Muscovites. We pursue the goals of sustainable development, so it is no coincidence that we are issuing green bonds. The funds raised will be used for the construction of the Great Circle Line of the Metro and the purchase of electric buses. Both of these projects will have a significant impact on the environment and contribute to improving the environmental situation in the city. Furthermore, the City of Moscow green bonds are Russia’s first sub-federal green issue. We hope that this offering will provide a new impetus to the development of the sustainable development sector in Russia by attracting new issuers, first and foremost, the constituent entities of the Russian Federation."
Vladimir Gusakov, Managing Director for Issuer and Government Relations at Moscow Exchange, said:
"I am delighted to welcome the City of Moscow, the first green bond issuer among the constituent entities of the Russian Federation, to Moscow Exchange. This is indeed an important event, highlighting the increasing importance of sustainability principles for the country's economy. Today, 15 bond issues of seven issuers totalling more than RUB 50 billion are traded on the Moscow Exchange's Sustainability Sector.
"Following the placement of the City of Moscow's green bonds, the volume of securities traded in the Sector is expected to increase nearly 2.5 times. I hope that the City of Moscow's successful experience will serve as a benchmark and example not only for other regions of the Russian Federation, but also for Russian corporations and banks. We, for our part, are ready to further improve listing rules and trading regimes and actively assist in disseminating best practices in sustainable development."
The proceeds from the bond placement will be used for urban transport infrastructure projects that reduce air pollution caused by automobiles. The Analytical Credit Rating Agency (ACRA) assigned a credit rating of AAA(RU) to the 74th issue of City of Moscow bonds.
On 21 May, a new version of the Moscow Exchange Listing Rules came into force, allowing sub-federal and municipal bonds to be included in the Sustainability Sector. MOEX’s Sustainability Sector was launched in 2019 to facilitate financing of environmental and social sustainability projects.
On 27 April 2021, the City of Moscow successfully placed its 72nd bond issue for RUB 35 bln on Moscow Exchange. The total volume of bids submitted exceeded the offer 2.3 times.