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Keywords: Real Estate
Green Bonds
Announcement Effect
Multivariate Regression Analysis
Event Study Analysis
Sustainable Investing
Climate Change
Ooi Thian Leong Joseph
2019-2020 RE
Event Analysis
Issue Date: 28-May-2020
Citation: KHOO SHI HAN TATUM (2020-05-28). THE ANNOUNCEMENT EFFECT OF GREEN BONDS. ScholarBank@NUS Repository.
Abstract: Real estate green bonds are a new but growing practice in corporate finance in the “green bond boom” (Morgan Stanley, 2017). In an industry where the natural environment is financially material to its core, the issuance of green bonds (GB) by real estate companies has become more prevalent over time; especially after the inclusion of green buildings as an eligible green project category for green bonds by the 2014 Green Bonds Principles (GBP), which are supported by the International Capital Market Association (ICMA). As one of the first empirical studies, this dissertation examines on the announcement effects of real estate green bond performance, while controlling for other factors. This report presents its findings using the event methodology covering 50 issuers from 12 countries for the period from 09/02/2014 to 19/02/2020. After compiling a comprehensive international real estate green bond dataset, this dissertation documents that real estate green bonds yield positive abnormal returns in the post-announcement periods; and that the first green bond announcements typically yield higher positive returns than that of subsequent green bond announcements, where the green label is also shown to have positive effect. In addition, it documents that the green bond announcement returns vary with the issuer’s consistency, which recognizes the importance of issuer commitment to green bonds in line with the Principle of Compensation; while the clustering effect is observed to complicate investors’ responses to green bond issuance based on issuer’s commitment to green bonds in real estate.
Appears in Collections:Bachelor's Theses

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