Bahamas Blue Bonds Lead sustainable issuance
In 2022, Latin America and the Caribbean (LAC) issued $20.1 billion international GSSS (green, social, sustainability and sustainability-linked) bonds, with The Bahamas’ blue bonds accounting for total sustainable bonds for the period.
The United Nations Economic Commission for Latin America and the Caribbean, in a recently released economic outlook report focused on “Investing in Sustainable Development”, noted that those two blue bonds made up the lion’s share of sustainable issuances by sovereigns in the past four years.
“In the LAC region... even with tight financial markets, GSSS bonds continue to be an attractive financing mechanism, representing 32 percent of total international LAC bond issuance. The region issued USD$20.1 billion of international GSSS bonds in 2022, down 56 percent from 2021, but still the second highest year recorded,” the report noted.
“Between 2014 and 2022, the GSSS international bond market reached a cumulative value of close to USD$100 billion, of which green bond issuance alone accounted for USD$33.4 billion, followed by bonds linked to sustainability criteria.
“GSSS refers to green, social, sustainability and sustainability linked bonds. Total sustainable bonds for 2022 include two blue bonds issued by The Bahamas.”
ECLAC said sovereign GSSS issuance has been growing as a share of total GSSS bond issuance in the region, noting that in 2022, sovereign GSSS bond issuance in international markets in the region accounted for 35.7 percent of the total sovereign issuance of all types of bonds in international markets.
“During the first six months of 2023, this figure increased to 43.5 percent. Until June 2019, all LAC GSSS bond issuances originated in the corporate sector, and corporates continued to lead total GSSS bond volumes in 2019 with a 44 percent share of the total, while sovereign issuances represented 37 percent, and supranational issuers 19 percent,” the UN body said.
“Sovereign issuances have since been rising. In 2022, sovereigns led with a 57 percent share of total GSSS bond issuance in LAC, followed by corporates (23 percent) and supranational and quasi-sovereign issuers (20 percent). In June 2019, Chile issued the region’s first green sovereign bond in international markets. By 2022, seven countries had followed (Ecuador, Guatemala, Mexico, Peru, The Bahamas and Uruguay [in order of appearance]) by issuing green (or blue), social, sustainability and sustainability linked bonds in international markets.
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