Thursday, November 21, 2013

Bank of America issues $500 million 'green bond'

Bank of America said Thursday that it has issued a $500 million bond the bank will use to finance green energy projects.

The bond offering is likely the first of its kind. And it has gathered interest from big name Wall Street investors and is the latest in the Charlotte bank's public commitments to green energy.

The three-year bond pays 1.35 percent interest per year. Bank of America will take the money it raised in the offering and use it to finance renewable energy and energy efficiency projects, like geothermal power and building insulation.

Bank of America will pay the principal and interest out of its general fund, according to the prospectus, instead of dedicating money the bank makes from its green investments toward paying investors.

Several big name institutional investors -- including BlackRock, California State Teachers’ Retirement System, State Street Global Advisors and TIAA-CREF -- participated in the bond offering, Bank of America said.

Bank of America has been a target for environmental activists in recent years, particularly at its annual meetings, because of the bank's funding of coal project. But the bank has also been active in its funding of renewable energy projects. Last year, Bank of America committed to investing $50 billion in green projects over a decade, after finishing an earlier, similar pledge ahead of schedule.

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