Bond spotlight

A2A goes for gold with an EU green bond

Written by Josephine Richardson & Patricia Hutchinson

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Italy’s A2A is the first issuer to place a bond that complies with the EU Green Bond Standard (EUGBS). The standard, which came into effect on December 21 last year, is intended to bring transparency and uniformity to the green bond market.

The debut issuance has been well-received by investors, and is pricing only slightly wider than a shorter-dated bond issued in February 2023. However, the EUGBS-aligned instrument bears a strong resemblance to A2A’s other green issuances, which may go some way toward explaining this.

The EUGBS requires issuers to align all bond proceeds to activities classified under the EU Taxonomy Regulation, which was introduced to funnel capital toward the bloc’s climate and environmental goals.

All but one of A2A’s previously issued bullet green bonds, however, were already fully allocated to this framework, meaning the EUGBS instrument represents more of the same to the company’s debt investors.

In this research note, we also unpack A2A’s two outstanding Sustainability-Linked Bonds – one of which looks likely to miss its Sustainability Performance Target and force an increase in the coupon paid to investors.

About the authors

Josephine Richardson

Josephine Richardson

Managing Director, Head of Research

Based in London, Jo leads AFII’s research and a global team supporting fixed income investors as they align their portfolios with climate and sustainability goals. She joined AFII after 18 years in fixed income markets at JPMorgan.

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