This will be a three year, fixed rate senior bond with $500 million in aggregate principal amount. Bank of America hopes this bond will encourage other banks to provide similar environmentally conscious services.
Current investors in the bond as listed on the press release are AP4, BlackRock, Breckinridge Capital Advisors, California State Teachers’ Retirement System, Calvert Investment Management, Pax World Management LLC, Praxis Intermediate Income Fund, State Street Global Advisors, Standish Mellon Asset Management Company LLC, TIAA-CREF and Trillium Asset Management LLC.
The bond issue is part of Bank of America’s larger campaign to provide $50 billion in financing to environmental and “green” projects over the next ten years. The projects funded through this campaign are intended to conserve scarce natural resources, mitigate and reduce the dangers of climate change, and push for an advanced fuel economy less reliant on standard carbon-emitting sources.
This is a massive enterprise, with an average of $5 billion a year needed to be invested in order to meet the target. According to Bank of America, related green projects for renewable energy may need over $1 billion in capital investment, whereas typical Bank of America investments run from $5 million to $100 million.
Bank of America sees this as a way to broaden its base and become more engaged in civic affairs. According to a spokesman, this recent bond issue is ““an opportunity to expand its investor base and to support an important market as investors seek more socially responsible investment options.”