GM selling first green bonds, aims to challenge Tesla in EVs
GM selling first green bonds, aims to challenge Tesla in EVs


General Motors aiming to compete with Tesla and transform the sustainable debt market to fund the transition to EVs, sole its environmentally friendly bonds for the first time ever, joining its competitors. 

The automaker priced $2.25 billion of green bonds in two parts. The longest portion of the offering, 10-year security, yields 2.95 percentage points above comparable Treasuries, after initial discussions of as much as 3.2 percentage points, said the person, who asked not to be identified as the details are private.

At $2.25 billion, it is the second-largest green deal from a U.S. corporation outside of the financial sector, according to data compiled by Bloomberg.

Head of ESG for commercial products at U.S. Bancorp Marcus Martin in an interview at Bloomberg headquarters in New York on Thursday said,  "For the future of not only automakers but just transportation more broadly, it portends very well to see the likes of GM come to market with a green bond,".

U.S. and European corporate debt investors rewarded the automotive sector with the largest price benefit average for selling green bonds earlier in the year, another incentive for the industry to tap this market. The 10-year green tranche appears about 9 basis points wider compared to the company's 3.1 per cent notes maturing in 2032, according to Bloomberg Intelligence credit analyst Joel Levington.

"It's more of a case of market conditions, more than the 'greenium,'" said Levington in emailed response to questions on Thursday. "I'm sure there is still plenty of demand for green bonds."

Barclays Plc, BNP Paribas SA, Bank of America Corp., Citigroup Inc., Credit Agricole SA, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley managed the bond sale, the person said.

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