The recent surge in social bond issuance indicates that the COVID-19 pandemic has not turned issuers’ or investors’ attention away from sustainable finance. Rather, interest seems to be growing, says a recent S&P Global Ratings report.
Corporations and financial institutions are likely to become more active in the social bond market as the pandemic accelerates private issuers’ interest in social considerations, the ratings agency believes.
In terms of issuance, Europe leads – reflecting its unique regulatory and political drive to stimulate activity in the sustainable finance markets. S&P Global Ratings believes these regional trends indicate that riskier investments, earmarked for social objectives, may be drawing increasing investor interest.
Following Moorgate’s outreach, the report was covered by Environmental Finance, ZAWYA, ETF Trends, Chief Investment Officer, and Philadelphia Tribune
Widespread coronavirus-related lockdowns and general economic downturn have had an unprecedented effect on global air traffic, which is projected to be down 55% in 2020. Writing in Aerotime, Julyana Yokota, Senior Director, Infrastructure, at S&P Global Ratings, takes a look at the implications for the global airport sector.
While airports generally enjoy stronger liquidity positions than airlines, they are now facing significant credit stress – especially given the uncertainty surrounding aeronautical revenue. With aviation charges likely to be lower due to a weakened airline sector, airports must make an effort to diversify their revenue streams. Some level of structural change in the airport sector is inevitable, however the asset class’ infrastructural significance is means it is likely to survive the turbulent times ahead.
The full article can be found here.
Speaking to Bloomberg, Eric Arnould, Global Head of Equity Capital Markets at Natixis, comments on Europe’s largest fundraising deals coming from bonds that can convert into equity and investors betting that the underlying stock will jump 50% or more in the next few years.
“Exposure to equity, coupled with volatile equity indexes and stabilization of credit spreads, is likely to spur even more convertible bond issuance in the second half of the year”, explains Arnould.
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As COVID-19, and the measures implemented to slow its spread, continues to impact economies around the globe, the link between Islamic finance and the social aspect of environmental, social, and governance (ESG)-focused investing are coming to the fore, according to S&P Global Ratings.
While the similarities between Islamic finance and the environmental and governance aspects of ESG have long been recognised, the social aspect of Islamic finance has until now been somewhat secondary. Now, with COVID-19 hampering core Islamic finance markets – and unemployment rates rising – the Islamic finance industry has been exploring the possibility mitigating the damage with social instruments.
S&P Global Ratings believes Islamic finance social instruments can support core Islamic countries, banks, and corporates in navigating today’s uncertain economic landscape.
Following outreach by Moorgate, the report was covered by The Peninsula Qatar, ZAWYA, Khaleej Times, Al Bawaba, Trade Arabia, Gulf News, Gulf Times, MENA FN, Al Khaleej Today, and Pakistan Observer
The International Chamber of Commerce (ICC) has released its 2020 Global Survey on Trade Finance, revealing that banks are optimistic about the evolving nature of trade finance, though unsurprisingly expect various industry-wide challenges and disruption as a result of the COVID-19 pandemic
In turn, ICC also conducted a supplementary COVID-19 survey to understand banks’ sentiment regarding the initial impact of the pandemic on trade finance, with banks across geographies reporting an average 0-10% decrease in their trade flows in the first quarter of 2020, and most expecting at least a 20-30% decline for the full year.
“Trade is fundamentally important to global economic health, growth and development, and is even more critical in times of crisis,” says Alexander Malaket, Chair of the ICC Global Survey on Trade Finance. “This latest edition of the report makes an important contribution to raising the quality and thoughtful character of the discourse on international trade and trade financing.”
The news was covered by The Paypers, TMI, TRF news, Trade Finance Global, Ledger Insights, TXF news, TXF news, Business Money, Hellenic Shipping News, GTR, CTMfile, Financial IT, The Asset, The Currency Analytics.
Speaking to the Financial Times, Karen Degouve, Head of Sustainable Business Development at Natixis, talks about investors becoming increasingly concerned about the financial risks emerging from biodiversity loss and destruction of ecosystems.
Natixis has set a biodiversity investment target of €2bn for its asset management affiliates, but it is still early days for investors in this area. “They need to realise that it’s the same as climate change for natural capital loss”, says Degouve. “It is going to threaten the world’s economic stability at some point, and ultimately the survival of human beings.”
To read the full article, please click here.
Writing in Infrastructure Investor‘s August edition, S&P Global Ratings’ Trevor D’Olier-Lees, Senior Director, Infrastructure, North America and Dhaval Shah, Director, North America, discuss the way in which domestic and international bans on travel have dealt an unprecedented blow to both traffic levels and P3 toll roads’ revenues in North America.
Certainly, the region’s toll roads have been heavily affected by the pandemic-related lockdown, coming under significant pressure from a credit perspective. Despite this, the impact has been less severe when compared with other transportation assets and, based on the current trajectory, a full recovery is expected – though the time it will take to reach this remains uncertain and will vary from region to region.
The full story in Infrastructure Investor may be found here, or on page 36 of the August print edition.
Commerzbank has published the latest edition of FI.News, the bank’s newsletter for financial institutions. Featuring various in-depth articles and interviews, the biannual newsletter collects Commerzbank’s latest insights on the challenges and opportunities that lie ahead for financial services in today’s transformational times.
Financial institutions are understandably operating in challenging circumstances. Yet this edition of FI.News keeps its gaze firmly ahead – exploring the ways that the current situation could be a catalyst for change in a number of areas, including digitalisation, trade finance, African trade and sustainable finance. The newsletter also provides latest news stories and internal updates from the Commerzbank Institutionals division.
Moorgate has produced FI.News since 2013. The latest edition may be found here.
Africa-EU trade relations have long been critical: the EU is Africa’s largest trade partner and this inter-continental trade barrier will be crucial to spur both region’s post-pandemic recovery.
Writing for Financier Worldwide, Jeff Fallon, head of client coverage at BACB, claims that despite likely changes to risk appetite for supporting this trade corridor, it would be short-sighted to let Europe-Africa collaboration fall behind.
Fallon writes: “Maintaining connections between Europe and Africa will be vital to economic recovery, and specialist banking partners that remain committed to Africa are on hand to help navigate the process.”
Read the full article here.