JPY Green Bond League Tables

Who are the outperformers in the JPY Green Bond space?

Japanese Yen denominated green bonds started when the International Bank for Reconstruction & Development(The World Bank) issued the first ever yen-denominated green bond. In 2008, the first green bonds were issued by The World Bank. Ever since then, the Japanese Yen has seen issuances of JPY 31Bn, equal to more than USD 310 Mn. Japanese banks have all issued statements supporting their underwriting of green bonds, but which banks have really stepped up historically? Banks will show league tables in favorable ways in their marketing materials, and it is hard to know which banks are truly the “green” bank. With the analysis of Bloomberg data, investors and corporates looking to buy or sell their ESG-related financial products, will know how to rank banks in their expertise.

The Analysis

Data

Bloomberg bond issuance data for green instruments and corporate bonds. The data will be need to be cleaned, as Bloomberg data has all bookrunner/underwriting information under one tab in “Lead Manager(s)”. Date formats will also need to be converted from the excel format to R format. Two data sets, one for green issuances, and one for bond issuances of a recent year will need to be combined in data analyses after the league tables are created independently of each other.

Procedure

Observe at total deals committed to by the banks, in terms of deal value and deal count. Then, compare this to the league tables of general corporate bonds in a recent year to see if there are over performers and under performers compared to general corporate underwriting.

Initial Results

From the initial analysis, we can observe that Mitsubishi UFJ Morgan Stanley has the advantage, due to the partnership between Mitsubishi UFJ, Japan’s #1 retail and commercial bank, and Morgan Stanley, a top American investment bank. Mitsubishii UFJ, now called MUFG, initially invested in Morgan Stanley during the Lehman shock, announcing a USD 9 Bn investment(21% ownership) in September 29, 2008. This has clearly paid dividends, allowing MUMS, their joint venture to take a clear lead in the JPY green bond issuance space. . . .

League Tables for all JPY bond issuances (2019-2021)

Now we will analyze the green-bond issuance league tables with all Japanese bond issuances (including green bonds) to see if the top performers in the general bond issuance space are different banks.

. . . . . .

Final Result of Analysis

We can observe that in 2019, Mizuho Financial was the top performer in corporate bonds, with Morgan Stanley, and SMBC at 2nd and 3rd. In 2020, Mizuho was also 1st, with SMBC at 2nd, and Daiwa at 3rd. However, in 2021, Nomura was the top performer across all JPY bonds, with Mizuho falling to 2nd place and Morgan Stanley claiming the 3rd spot. The performance on all JPY bonds is not in line with the performance on historical green bonds.

Mitsubishi UFJ Morgan Stanley in Japan is the clear winner in terms of green bond issuances. This arises from Morgan Stanley being able to leverage MUFG’s strong client-base, while MUFG is able to leverage Morgan Stanley’s global capabilities and expertise in leading ESG issuances globally.