Matt Levine’s Money Stuff: BlackRock Borrows Against Diversity

Nice BlackRock

The basic idea of green bonds is that some investors want to finance environmentally friendly projects, for reasons of their own, and they are willing to pay more to do so. So if a company can issue bonds at a 4% yield to finance its regular business, perhaps it can issue green bonds at a 3.9% yield to finance its green projects. There is extra demand for sustainable finance — demand from individual investors who care about sustainability, or from institutional investors with sustainability goals in their mandates — and so issuers of green bonds can get a “greenium,” that is, get ...