Sustainability-Linked Bonds now displayed on the LGX

To keep up to speed with recent market developments, the innovative Sustainability-Linked Bonds (SLBs) can now be displayed on the Luxembourg Green Exchange (LGX).

The Luxembourg Stock Exchange (LSE) has decided to welcome Sustainability-Linked Bonds (SLBs) on its Luxembourg Green Exchange platform (LGX), alongside Green, Social and Sustainable Bonds, as well as Green, Social and ESG Funds.

This decision follows the publication of ICMA’s Sustainability-Linked Bond Principles (SLBP) in June 2020 and takes into account an increased popularity for these sustainable debt instruments.

SLBs are performance-based bond instruments whose financial and/or structural characteristics can vary depending on whether the issuer achieves predefined sustainability objectives within a predefined timeline. The potential variation of the coupon of the bond is the most common example.

According to the SLBP, an issuer will first have to select one or more Key Performance Indicator(s) (KPI(s)), which must be "material to the issuer’s core sustainability and business strategy and address relevant environmental, social and/or governance challenges of the industry sector and be under management’s control". As a second step, an appropriate and “ambitious” target level (i.e. Sustainability Performance Targets (SPTs)) must be calibrated.

Unlike Green, Social and Sustainability Bonds, which proceeds can only be used to finance a pre-determined green, social or sustainable project, proceeds deriving from SLBs do not need to be allocated to a specific project and can be used to finance any corporate activity, thus shifting the focus on the overall sustainability progress achieved by the issuer.

SLBs can therefore offer new opportunities to sectors where it is difficult to identify environmentally positive projects that can be matched with the issuance of Green, Social and Sustainability Bonds (like for example, consumer goods companies).

The sustainable finance market will hence be accessible to a much broader scope of participants.

For further information, please visit the LGX dedicated webpage.

Voir aussi : Loyens & Loeff Luxembourg S.Ă  r.l. ( Mr. CĂ©dric Raffoul )

[+ http://www.loyensloeff.com]

Mr. CĂ©dric Raffoul Mr. CĂ©dric Raffoul
[email protected]

Click here to see the ad(s)
Tous les articles Droit financier

Derniers articles Droit financier

Strengthening the integration and efficiency of capital markets to support economic growth

Today, on 25 November 2021, the EU Commission published a package of legislative proposals. With the proposed measures, th...

Strengthening the integration and efficiency of capital markets to support economic growth Read more

Assessment of predicate tax offences in an AML/CTF context: The asset management industry should ...

The new provisions introduced by Circular 17/650, as amended through Circular 20/744, impact the AML/CFT compliance obliga...

Read more

Draft RTS and ITS on disclosure of information to investors under the European crowdfunding servi...

On 9 November 2021, the European Banking Authority released draft regulatory technical standards (the “RTS”) o...

Read more

Updated CSSF FAQs on UCI Law and MMF Regulation: Change of regulatory practice concerning the hol...

On 3 November 2021, the CSSF has announced in its Press Release 21/26 that it has published updated versions of ...

Updated CSSF FAQs on UCI Law and MMF Regulation: Change of regulatory practice concerning the holding of ancillary liquid assets by UCITS Read more

Derniers articles de Mr. CĂ©dric Raffoul

The Luxembourg Stock Exchange issues its first guidelines for SPACs listings

The Luxembourg Stock Exchange (LuxSE) has published on 19 August 2021, its first guidelines for the listing of SPACs on ea...

Read more

Climate-Aligned Issuers now displayed on the Luxembourg Green Exchange

The Luxembourg Green Exchange has recently added to its labelled bond section, a brand-new section dedicated to Climate-Al...

Read more

LuxSE prepares for ESEF (European Single Electronic Format) compliance

From 1 January 2020, issuers on EU regulated markets falling under the scope of the Transparency Directive, will have to p...

Read more

Listing without trading – The Luxembourg Stock Exchange’s Securities Official List

The Luxembourg Stock Exchange (LuxSE) has recently launched its Securities Official List (SOL), a dedicated section of the...

Read more

LexGO Network