David Nelson and Kate Hodson recently attended the second
annual Green Bonds Asia conference in Hong Kong. Here David reviews
the key talking points from the forum.
The panel on sustainable loans was a fascinating discussion on
the current market and upcoming developments for green loans and
sustainability linked loans, primarily in Asia but also in Europe
and North America.
Green loans (GLs) require the loan proceeds to
be used for one or more specified green projects. In contrast,
sustainability linked loans (SLLs) provide the
borrower with flexibility as to use of proceeds but with a margin
reduction, where the borrower meets certain specified environmental
or sustainability criteria. It was noted that, to date, the
criteria in SLLs have tended to focus on environmental
considerations.
