Indiana Financing Authority (IFA) is set to issue its second green bond of 2016, in the latest in a series of issues from US municipalities for sustainable water projects.
Proceeds from the green bond, which the IFA hopes will raise $193.5 million, will be used to finance improvements in the city of Indianapolis wastewater system.
JP Morgan, Wells Fargo, Morgan Stanley and City Securities Corporation are co-lead managers for the deal, which comes just five months after it launched a $115 million green bond.
This latest deal marks IFA's fourth foray into the green bond market.
Last year, IFA issued its inaugural green bond raising $100 million, which it quickly followed with a $140 million offering one month later.
This is the fourteenth green bond from a US municipality issued to exclusively finance sustainable water projects this year, according to the Green Bond Database published by Environmental Finance.
Green bonds issuance from US municipalities have increased over the few past years, with the majority of these bonds being targeted at sustainable water projects. So far this year, they have raised $2.5 billion for sustainable water projects out of a total raised of $4.6 billion.
Other notable municipal issuers to tap the market this year include Massachusetts Water Resources Authority, which itself returned to the market twice raising a total of $790 million.
However, green bonds that raise capital from water projects can be controversial. Some people argue that projects that provide drinking water are not necessarily green, while some water projects can have environmental impacts. See our op-ed here.
