Ground-breaking Enel bond introduces sustainability-linked pricing

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By Jon Hay
06 Sep 2019

A new sustainable finance product, which has the potential for huge growth, was launched on Thursday when Enel, the Italian electricity and gas company, issued the first bond in which the interest rate can be altered during the term of the debt, based on the borrower’s sustainability performance.

If Enel fails, by the end of 2021, to raise the percentage of its power generating capacity that is renewable to 55%, it will pay a 25bp coupon step-up. The percentage is now 45.9%.

The $1.5bn five year bond attracted nearly $4bn of demand, and Enel reckoned it ...

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