Visa Announces Launch of Green Bonds Worth $500 Million

The bonds have a maturity period of seven years

August 18, 2020


Visa, a U.S.-based multinational digital financial service provider, announced that it has issued its inaugural green bond offering, totaling $500 million (~₹37.38 billion).

A green bond is a fixed-income instrument designed to raise money mainly for projects related to climate and sustainability. This green bond offering aims to help the company strengthen its commitment towards a sustainable payment ecosystem and environmental sustainability.

The issued green bond offering has a semi-annual coupon rate of 0.75% with a maturity period of seven years.

According to the Visa Green Bond Framework, the proceeds of the green bond will be used to finance various sustainability projects to expand the consumption of renewable energy sources, energy efficiency, among others. It will also be used to provide fundings for research and development projects with a focus on sustainable consumer behavior.

The company said that these projects build on Visa’s sustainability leadership, including its transition to 100% renewable electricity across its operations achieved at the start of 2020. In a press statement, Visa said that the company would issue an annual report on the use of proceeds from the green bonds and its environmental impact.

“Our green bond offering will help us accelerate the transformation of our infrastructure and operations to reach our environmental goals. This commitment extends to appointing Visa’s first chief sustainability officer, tasked with ensuring we continue to take bold and industry-leading actions on the environment,” said Al Kelly, chairman, and chief executive officer of Visa.

“Through our green bond offering and together with our initiatives driving inclusive economic growth, we are working to ensure people and planet both can thrive together,” said Douglas Sabo, Chief Sustainability Officer of Visa.

Recently, the HSBC Global Asset Management and the International Finance Corporation (IFC), the financial arm of the World Bank Group, had announced the third closing of the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO). Nearly $474 million (~₹36 billion) was raised to support climate mitigation investments across the emerging markets. In June 2019, the International Finance Corporation, along with HSBC Global Asset Management, had announced the first global green bond fund aimed at real economy issuers in developing markets, to help in improving accessibility to climate finance and enhance green bond markets.