Enel-SG trade shows derivatives market’s sustainable longings

Sustainable development from Adobe 230x150
By Jon Hay, Ross Lancaster
12 Sep 2019

The over-the-counter derivatives market is one of the last areas still barely touched by the wave of interest in environmental and social issues that is sweeping financial markets. But below the surface, derivatives players want to get involved. That was highlighted publicly on September 5 when Enel, the Italian power and gas group, engaged with Société Générale in what it called “the world’s first Sustainable Development Goal-linked cross-currency swap”.

The trade was structured to accompany an innovative $1.5bn bond Enel issued, the first to have pricing that can be varied during the deal’s life according to how the issuer performs on sustainability metrics.

Enel will pay investors in the five year bond a coupon step-up of ...

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