Natixis at the Euromoney/ECBC covered bond congress in Munich

The event gathered more than a thousand participants from more than 35 countries, including 400 customers. Banks, investors and issuers, intermediaries and policymakers were all present. 

For this 2019 edition, Natixis hosted a workshop entitled "Green/social covered bonds: a practical guide" and organized more than 30 issuer/investor meetings, demonstrating its global expertise in the covered bond market.

Focus on the green and social covered bond market

€12bn in green and social covered bonds have been issued since their launch.They differ from traditional covered bonds in two ways:

- they are based on the International Capital Market Association’s Green and Social Bond Principles;

- the proceeds refinance assets that are environmentally and/or socially sustainable, such as green buildings.

Advantages for issuers:

Issuing green/social covered bonds allows issuers to:

  • affirm their commitment to Corporate Social Responsibility;
  • diversify their investor base (since green investors representing between 35% and 50% of the deal);
  • secure green funding;
  • benefit from the “buy and hold” profile of SRI/Green investors.

Who are the investors?

Green investors are primarily asset managers and insurance companies, although banks’ treasuries, the public sector and various agencies with green investment targets have also invested in them to a lesser extent.

A growing market

Given rising investor demand for green covered bonds, the market for them should continue to grow. Several issuers (notably in Norway and in Poland) have announced their intention to issue sustainable covered bonds in the near future.

At the Euromoney / ECBC Covered Bond Congress, speakers from Natixis CIB’s Research Department and Green Hub emphasized that the key to a successful green and/or social covered bond issuance lies in listening to investors’ criteria and rationale. They also called for an acceleration of the market, given that the green and social covered bond still lags behind the faster-developing wider green bond market.

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