Visa Sells its Green Bonds at Record Low Yield, Will Fund Green Projects

Visa Inc has announced that it has successfully completed the sale of its green bonds at a record low yield

Leading consumer finance company Visa Inc has announced that it has successfully completed the sale of its green bonds at a record low yield, as it becomes the first company in its field to issue debt to fund environmentally friendly green projects.

According to Bloomberg, the world’s largest payments network, sold USD 3.25 billion of debt in three parts. The shortest portion of the deal is a seven-year green note with at 0.75 percent coupon, sliding past Google parent Alphabet Inc.’s record-low 0.8 percent from last week on an ESG debt sale with a similar maturity. Visa’s USD 500 million security due 2027 marks the first dollar-denominated green bond from the consumer finance space, according to data compiled by Bloomberg.

Google parent Alphabet Inc sold USD 5.75 billion of sustainability notes at record-low rates last week, the largest-ever from a corporation.

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The San Francisco-based firm plans to use the proceeds from the green tranche to finance projects that meet eligible categories, including green buildings, renewable energy, sustainable water and wastewater management and projects that support sustainable living behaviours.

The firm in January had said that it had reached its goal to use 100 percent renewable electricity by 2020 through energy sources like solar and wind as part of its sustainability commitment across its operations, including 131 offices in 76 countries and four global processing centres.

“At Visa, we see both a responsibility and an opportunity to make broad shifts toward a sustainable and inclusive future,” Al Kelly, chief executive officer of Visa Inc said at the time. “I’m proud of the investments we’ve made in our infrastructure to reach this important renewable energy milestone. We will continue to prioritise advancing the role of our business and industry in transitioning to a cleaner global economy.”

Companies and governments have raised about USD 113 billion in the green bond market this year, a slight decline from USD 118 billion in the same period last year, according to Bloomberg. Meanwhile, sales of bonds to address social issues jumped a record 376 percent in the first half of the year as issuers ramped up borrowing to tackle the coronavirus pandemic.