ECB’s green light for coupon step-ups to unleash SLB potential

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By Jon Hay, Mike Turner
24 Sep 2020

The European Central Bank decision to exempt sustainability-linked bonds from its internal rule that stops it buying bonds with step-up coupons is the final step in allowing this new market to take flight, specialists said this week.

SLBs are a still very new form of sustainable finance that has proved popular with investors. Based on sustainability-linked loans, the instrument gives the issuer a free hand in how it uses the bond proceeds. But the issuer commits to meet a sustainability target and will pay bond ...

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