Goldman Sachs Group Inc is just getting started in the fast-expanding world of sustainable finance.
The New York-based lender plans to issue more environmental, social and governance (ESG) bonds on a regular basis as part of its plans to deploy US$750 billion in sustainable financing, investing and advisory activity by 2030, according to Goldman Sachs Bank USA chief executive officer Carey Halio. It sold bonds aimed at financing environmentally and socially conscious projects for the first time on Wednesday.
“We expect to issue once every 12 to 18 months with respect to benchmark issuance and we have the flexibility to do other kinds of liabilities as well in addition to the benchmark bond,” Halio said in an interview on Friday. “We think it will be a core part of our strategy.”
Goldman said its sustainability bond was well received by investors from the US, Europe and Canada, in addition to other countries, including new investors. The order book reached well north of US$3 billion at the peak, with more than half of the deal going to ESG accounts. The demand helped it price 5 basis points inside of the bank’s normal credit curve for the tenor, Halio said.
“We do think the size of our ESG bonds will grow over time,” Halio said. “We think investors value the liquidity in the benchmark size issuance.”
The firm will also consider issuing in different currencies in the future, including in euros.
Goldman Sachs Group chairman and chief executive David Solomon said in a statement on Friday that building a low-carbon and an inclusive economy is a “business imperative” and the lender is demonstrating its commitment by using the same financial toolkit the bank recommends to its clients.
Financial firms globally have raised about US$25.5 billion of ESG-linked debt this year, making the sector the biggest issuer of sustainable bonds after governments, according to data compiled by Bloomberg. The sector borrowed a record US$111.8 billion last year. That included deals from Bank of America Corp, Citigroup Inc and Morgan Stanley.
Goldman is joining other top Wall Street banks that have been issuing ESG bonds amid pressure for the private sector to do more to promote ESG issues. JPMorgan Chase & Co, the biggest US bank by assets, priced a US$1 billion social bond on Tuesday and raised a similar amount of green debt last year.
“It was so critical to us to do a robust evaluation of what we’ve seen over recent years to identify a group of themes where we feel we can really advance the transition and advance the story globally,” Goldman global head of investor relations Heather Miner said in the interview.
Nuveen, which oversees US$1.2 trillion in assets, participated in the Goldman deal, said Stephen Liberatore, head of fixed-income ESG and impact investing strategies at the firm. They found the valuations attractive and liked the bank’s sustainability framework, which is “robust” and allows them to invest in a broad range of environmental and social projects.
Proceeds will help to fund or refinance a combination of loans and investments made in projects and assets that meet Goldman’s green and social eligibility criteria, including clean energy, sustainable transport and financial inclusion, according to the framework.
“The more issuers come and the more prominent those issuers are, only helps further the message that we are looking at things in a different way,” Liberatore said. “That’s a real positive and should help borrowers that maybe aren’t sure what they need to do.”
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS