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Wide-angle lens:
Credit ratings agencies dominated the ESG ratings world in 2019, snapping up smaller specialists and unveiling new products. For accelerating the push to standardise disparate ESG information, identify risk, and ultimately link it to the cost of debt, S&P Global Ratings is IFR’s ESG Opinion Provider of the Year.
To the future Societe du Grand Paris issued a €2bn 15-year green bond from its green EMTN programme in March that set a new benchmark and allowed the issuer to extend its green curve. SGP was set up to finance one of Europe’s largest infrastructure projects: the Grand Paris Express automated metro system, an ambitious €35bn project that will see the city build four new underground lines to its suburbs. The project is part of the French government’s commitment to carbon neutrality by 2050. “This is one of the highest-profile projects that’s pure...
ESG hits lev loans The leveraged loan market took its first step into sustainable financing in 2019 by adding ESG criteria to a €1.7bn covenant-lite refinancing for Spanish telecoms operator Masmovil, reflecting growing investor interest in the space. Private equity-owned firms were late to the ESG party, but this changed after a presentation at BNP Paribas’ high-yield and leveraged finance conference in January produced a deal that set a clear precedent and started a necessary conversation. “It completely changed the dialogue in the market...
Healthcare first for social Caisse Francaise de Financement Local in February issued the first social covered bond and the first covered bond fully dedicated to financing public healthcare in a groundbreaking deal that offered diversification to the social and covered bond markets, and set a benchmark for healthcare bonds. The €1bn February 2029 bonds are the first to be 100% allocated to financing hospitals, the first French sustainable covered bonds, and the first social bonds to be raised by a French public sector issuer. “We’ve seen covered...
Food transition French supermarket group Carrefour’s aim to be the world leader of food transition produced the biggest social sustainability-linked loan of the year, as the company amended two loans totalling €3.9bn that are linked to its pioneering corporate social responsibility initiative. The financing is the first CSR-linked loan in Europe’s retail sector and included 17 ambitious strategic objectives or key performance indicators, with a strong social focus that underpin the four pillars of its “Carrefour 2022” transformation plan. ...
Trade tensions between Beijing and Washington are threatening to spill over into capital markets, with some policymakers even calling for a ban on Chinese listings in the US. Just how far can it go?
As Japanese fund managers broaden their search for yield, international issuers are finding they no longer need to spend the time and money to prepare local language documentation. Old habits die hard, however, and lengthy marketing periods are still standard practice.
Primary bond markets have proved a testing ground for the transition from inter-bank offered rates to new alternative risk-free rates. But the abundance of issuance referenced to Sonia and SOFR should not obscure the unfortunate fact that most of the proceeds have immediately been swapped back to Libor by the borrowers.
Is the traditional green bond market threatened by the emergence of transition bonds, SDG bonds, general-purpose bonds with environmental targets and other debt classes intended to encompass wider environmental goals? Does it matter if new market segments are more effective at reducing the emission of greenhouse gases?
As another painful year for Europe’s banks draws to a close, the need for big bank consolidation has never been greater.
