By Tyler Davies
27 Apr 2021
There is a golden opportunity for banks to set a precedent by issuing sustainability-linked bonds across the capital stack, rather than waiting for regulators finish fretting over the guidance.
SLBs have been growing in popularity in the capital markets, appearing as the hot new ESG alternative to tried and tested “use of proceeds” bonds and loans.
The sustainability-linked deals require borrowers to commit to achieving sustainability targets within a certain timeframe. If they fail to meet their goals, they may then need to pay a penalty to their investors in the form of a larger coupon.