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Green Bonds – Frequently Asked Questions

BAM GreenStar is designed to help close the gap between the significant number of municipal bonds that fund projects that are eligible to be financed with green bonds and the relatively few that are currently being labeled as such. BAM GreenStar addresses:

  • The limited awareness of the benefits of Green Bond issuance among issuers
  • The lack of scale in the number and volume of Green Bond sales in the U.S. municipal sector, which limits the number of investors focused on the sector and imposes friction costs on green bond transactions
  • Perceptions that verification and reporting carry a high cost

BAM will assign a BAM GreenStar designation to eligible bonds sold by a BAM member issuer at no incremental cost to the issuer, leveraging our core competence in analyzing municipal accounting and financial reporting, capital investment plans, and legal documentation, and building on our existing annual credit surveillance. BAM GreenStar is a cost-effective and transparent way for issuers to access the municipal green bond market.


  • What is BAM's criteria for GreenStar designation?

    BAM criteria will vary depending on sector but are based on four fundamental components:

    • USE OF PROCEEDS Are the bond proceeds being used exclusively to fund green projects?
    • PROJECT SELECTION Is there sufficient disclosure about the project specifications to ensure it is eligible for BAM’s GreenStar designation?
    • MANAGEMENT AND ALLOCATION OF PROCEEDS Is there sufficient confidence that the bond proceeds will be spent on the identified eligible projects?
    • REPORTING Will the issuer agree to provide updates on the construction status of the eligible projects until completion?

    The most likely transactions to comply will be water and sewer and transportation sectors.

  • What happens if the proceeds are not utilized in the manner described in the OS?

    Issuers who spend bond proceeds on excluded projects can have the BAM GreenStar revoked.

  • What benefit is there to having a BAM GreenStar designation?

    The GreenStar designation may widen and deepen an issuer’s investor base to include the rapidly expanding group of investors pursuing ESG (Environmental, Social and Corporate Governance) strategies.1

  • Are there any continuing obligations imposed on the issuer after closing?

    There are no obligations. BAM’s surveillance staff will reach out to request annual updates on the completion status of new products until they are placed into service.

  • What is the cost of BAM's GreenStar designation?

    There is no additional cost to obtaining the BAM GreenStar designation. BAM will assess the suitability of every issue that it underwrites as part of its regular underwriting process and notify the issuer if their bonds are eligible.

  • How will the municipal advisor, underwriter and investors know that a bond issue has the GreenStar designation?

    The BAM analyst will work with the Municipal Advisors to confirm eligibility during BAM’s underwriting process and obtain issuer consent.

    The BAM GreenStar designation will appear:

    • NEGOTIATED TRANSACTIONS In the Preliminary and Final OS and ultimately in descriptive info on Bloomberg, as well as BAM’s Credit Profile
    • COMPETITIVE BID TRANSACTIONS The issue will be denoted as “GreenStar eligible” on the pricing sheet BAM distributes on the bid date and if the winning bid utilizes BAM insurance, the status will be included in the Final OS and on Bloomberg as well as BAM’s Credit Profile
  • What additional documentation is required to receive the BAM GreenStar designation?

    Eligible issuers can finalize their BAM GreenStar status by executing a simple consent form which will include:

    • an agreement to the assignment of the Green Star designation for the issue, and
    • an agreement to provide BAM with annual disclosure on the project status with respect to expenditure of proceeds until project completion.

    Eligible issuers are not required to accept the BAM GreenStar designation, and can decline the assessment at any time.

  • How many GreenStar designated transactions does BAM have in its portfolio?

    BAM has verified the green bond status of 156 transactions worth $2.2 billion, as of December 31, 2020.

  • Can issuers receive a BAM GreenStar designation by raising funds for eligible projects in a single series of a larger bond issue?

    Yes, the BAM GreenStar can be assigned at the series level, as long as the proceeds from that series fund eligible projects.