Americas ESG Financing House: Bank of America

IFR Awards 2022
4 min read
Julian Lewis

Powering up
Bank of America claimed a leading position in all the major areas of ESG financing in the Americas in 2022, building on a major expansion of its team and shooting up the league tables. It is IFR’s Americas ESG Financing House of the Year.

Bank of America saw immediate returns as it powered to a leading position in ESG bonds across the Americas in 2022 after having established a new ESG advisory and financing solutions team late the previous year. The bank also kept its position as the region’s top player in green and sustainability-linked loans, and in US municipal green bonds, while growing its presence in ESG equity capital markets.

The bank’s push saw it grow its new team to nearly 30 professionals, from 13 at the start of the year, and build on its traditional high-grade ESG debt capacity by supporting leveraged finance and ECM efforts with ESG expertise too.

“We're now looking at the capital markets as a whole and I think that's been particularly successful,” said Andrew Karp, head of ESG advisory and financing solutions at Bank of America.

“The amount of effort and amount of progress we have made is significant,” said Karen Fang, global head of sustainable finance.

The resulting uptick, which the bank underscored by hiring new Americas ESG advisory and ESG ECM heads, was clearly visible in the league tables.

BofA reversed JP Morgan and Citigroup’s previously substantial lead over it in US ESG bonds. It outperformed the market’s 32% year-on-year downturn, with its US$7.7bn of deals putting it nearly US$2bn ahead of the nearest competitor while gaining it over two percentage points of market share, according to Refinitiv data.

It also ascended to prominence as the top green bond underwriter globally and number two for ESG bonds, the data show. This compared to its eighth and seventh positions in 2021, respectively.

A raft of blue-chip ESG debt underpinned BofA’s surge. Its US bond highlights featured a US$1.3bn inaugural sustainability-linked bond from Eaton Corp and American Express’s debut US$1bn sustainability bond.

In addition, it was sustainability structuring agent for the first corporate “equality progress” bond. Georgia Power issued the US$800m 30-year note.

The format, which BofA pioneered in its own name, commits issuers to spend at least 50% of proceeds on social projects that primarily benefit minority and/or women-owned suppliers.

The bank was a joint bookrunner for Honda’s US$2.75bn triple-tranche green bond debut, too. It also won leading roles on green, sustainable and SLB deals from Amgen, Archer-Daniels-Midland, General Motors, Intel, John Deere, MetLife, S&P and Verizon.

Meanwhile, the bank’s top-ranked US$29.5bn of ESG lending in the region (pro rata; US$217bn full credit) saw it serve as sustainability agent on US$10bn of SLLs for Alphabet, Google’s parent.

It had the same role on KPI-linked revolving credits totalling just under US$5bn for logistics real estate investor Prologis, as well as on multi-billion US dollar SLLs for ESAB, Fortive, Gap, International Game Technology, Sysco, Tetra Tech and Trimble.

The bank was also active elsewhere. One of its largest ESG bonds in the entire region was a US$1.75bn sustainable dual-trancher for Mexico’s Comision Federal de Electricidad.

In addition, it jointly led a US$400m sustainability-linked bond for Brazilian media company Grupo Globo and a US$600m sustainable for Peru’s state-owned housing bank Fondo MiVivienda.

BofA also led US-targeted green bonds for both Brookfield and TransAlta of Canada.

BofA’s broader ESG financing activity included the first sustainable US commercial paper programme for a utility. The bank was sustainability structuring agent on Duke Energy’s US$6bn facility, as it had been on two of only three previous green/sustainable US CP programmes; it is a dealer on all three.

BofA jointly led US$900m of sustainable bonds for the utility.

It also built on its role as a bookrunner on footwear manufacturer Allbirds’ landmark US$348m IPO in 2021 – the first to offer a sustainability principles and objectives framework – with a further ESG ECM highlight: acting as a joint lead on an innovative “green equity” issue. Portland General Electric committed to use proceeds from the US$435m follow-on deal, which involved a two-year forward sale, on eligible projects defined by its green financing framework – just as it would for a green bond.

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