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CPPIB to Become First Major Pension to Issue Green Bonds

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On the back of the G-7 summit in Quebec, the Canada Pension Plan Investment Board (CPPIB) announced plans to issue green bonds dedicated to generating funds for investment in wind and solar power, sustainable water and waste management, and energy-efficient buildings, making it the first large public pension fund to sell debt securities for the backing of eco-friendly projects.
The AAA-rated fund’s statement said the inaugural bonds will be denominated in Canadian dollars and issued on a private placement basis to certain qualified accredited investors, but did not specify when the sale would take place or how much would be on offer.

Increasingly Canadian pensions such as PSP Investments, CDPQ and CPPIB have been snapping up renewable energy plants, whether in wind or solar, across North America and in some instances in Europe and Latin America.

“The issuance of green bonds is a logical next step to CPPIB’s investment-focused approach to climate change, and we are pleased to be a pioneer among pension funds in this regards,” said Poul Winslow, senior managing director and global head of capital markets and factor investing at CPPIB.

Green Bonds in Asia

Hundreds of billions could be raised over the next five years in green bonds by Asian entities, according to SWFI calculations. In June, the International Finance Corporation (IFC) and the Monetary Authority of Singapore (MAS) signed a Memorandum of Understanding (MOU), agreeing to work together to accelerate the growth of green bond markets in Asia. The MoU aims to promote internationally-recognized green bond standards and frameworks. The Hong Kong Monetary Authority (HKMA) revealed that between January 2018 and May 2018, the Hong Kong as a city issued HK$ 39 billion worth of green bonds. In May, the Bank of China raised a US$ 1 billion green bond issue. Swire Properties and Beijing Capital Group each raised US$ 500 million in green bonds.

Think Tanks Reveal Needs

Annual issuance of the environmentally friendly securities reached US$ 155 billion in 2017, a 78% increase over the year previous, and is expected to reach US$ 1 trillion by 2020, according to the Climate Bonds Initiative. The Climate Bonds Initiative is financially majority-backed by the Rockefeller Foundation, Bank of America, National Australia Bank (NAB), Bloomberg Philanthropies and the Swiss government.

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Now GE Really Needs Sovereign Wealth Money

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General Electric (GE) used to be a giant, being involved in media and having a massive financial arm called GE Capital. The new GE is small and timid and could possibly use a strategic financial partner to become great again. Can GE find a sovereign wealth fund partner? Will Mubadala Investment Company come back to the table? Gone are the days of Jack Welch. The current GE strategy is to sell, sell, and sell, while doing the tango with US$ 115 billion in debts. In other words, the blind is following the blind, as a possible death spiral could be in GE’s future.

With a quarterly dividend at a paltry one cent, GE, the company that brings good things to life has slipped to its lowest level since 2009. GE indicated that cutting its dividend to US$ 0.01 per share will save the company US$ 3.9 billion per year. Meanwhile, third quarter revenue missed Wall Street’s expectations. Revenue came in at US$ 29.57 million, which was less than the US$ 29.92 million analysts anticipated. Earnings per share also fell US$ 0.06 short of expectations.

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McDonnell Investment Management to Integrate into Loomis Sayles

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McDonnell Investment Management, LLC is being integrated into Loomis Sayles & Company, L.P. by the early part of 2019. Both asset managers are affiliates of Natixis Investment Managers. The cost saving measure will enable McDonnell clients opportunities to Loomis Sayles’ resources and operational capabilities. McDonnell Investment Management manages US$ 11.7 billion in assets at September 30, 2018. The municipal business assets under management is about US$ 6.9 billion.

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Chuck Grassley Leaves Judiciary for Senate Finance Chair

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U.S. Senator Chuck Grassley, age 85, is leaving the Senate Judiciary Committee as chair. He will become Chairman of the Senate Finance Committee next year. The Iowa Republican has served as chairman of the Judiciary Committee since January 2015. Chuck Grassley served as Chair of the Senate Finance Committee in 2001 and from 2003 to 2007.

Grassley is replacing Senator Orrin Hatch (from Utah) who is retiring from the Senate. Replacing Orrin Hatch in Utah as Senator, is former Republican Presidential candidate Mitt Romney, who lost the 2012 election to Barack Obama.

“Looking ahead, at the Finance Committee, I want to continue to work to make sure that as many Americans as possible get to experience this good economy for themselves,” said Senator Grassley in a statement. “That means working to provide Americans with additional tax relief and tax fairness so they can spend more of their hard-earned money on what’s important to them.”

The Committee on Finance is one of the original committees established in the Senate and was first created on December 11, 1815. The committee deals with a whole matter of issues including taxation, revenue, customs, trade agreements, Social Security and more. It is considered to be one of the most powerful committees in Congress. In addition, the Committee on Finance has jurisdiction over both Medicare and Medicaid.

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