Sustainable finance had already been gaining momentum prior to the pandemic, but the current situation has prompted a greater sense of urgency around the need to transition towards a greener global economy. Long Say Huan, senior banker for financial institutions at Commerzbank, explores the role of financial institutions in driving this change in Renewables Investor.
The recent oversubscription of the Kookmin Bank’s COVID-19 Response Sustainability Bond, — the first COVID-related issuance by a non-sovereign institution in Asia — provides tangible evidence of growing interest among financial institutions in prioritising sustainable outcomes. Transitioning to a greener economy, argues Long, requires financial institutions’ perspectives to be adjusted to look beyond immediate commercial gains towards longer-term sustainable profitability.
Read more in Renewables Investor.
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
On Tuesday 15th November, Cassa Depositi e Prestititi proved that social bonds are all the rage, drawing orders in excess of €2.25bn, including €110m of joint leader manager interest.
As Joint Bookrunner, UniCredit helped set the spread for the for the €500m no-grow five-year at 57bp over mid-swaps (having started marketing at high 60s).
Speaking to IFR, Pietro Bianculli, Co-Head of IG & CEEMEA Bond Syndicate at UniCredit, commented: “This is the first Social Bond out of Italy, and the first in Europe dedicated to areas affected by natural disasters.” He added, “We priced inside of fair value, at 14bp over BTPs, whereas original expectations were slightly wider”.
To read the article please click here (please note, it lies behind a paywall)