Introduction
We continue to see many transitions in both the loan and bond space.
Some of these deals have more holes than a pair of pink (or any colored) Crocs that Swiss cheese makers would be proud of!
Whilst KPIs and related targets can be difficult to structure, as many sustainability related items don’t fit into nice round numbers – another issue is that there often isn’t a good benchmark of what good looks like for many issues.
In the below we seek to highlight some of the common points of contention for linked instruments. Let’s take a look…
Key Potential Implications
Conclusion
As per the above, SLLs and SLBs are rather like a nice Swiss fondu – nice to dip in and out of but really need structural integrity to be a proper desert or even a savory cheese (without the holes).
Linked instruments have an important role in continuing to broaden out sustainable finance markets and we hope that the above structuring holes can be worked through and addressed.
Recent numbers in sustainable finance and anecdotal thoughts indicate there is a move away from linked to more traditional use of proceed instruments, in tougher market conditions.
We hope that the above can help to improve structuring and integrity of linked instruments.
After all we really don’t like Swiss cheese or Crocs (even worse…eating Swiss cheese wearing crocs!!)
