Snam’s use-of-proceeds bonds have allocated ~40% of proceeds to retrofitting its network and transporting greener gases, directly supporting its goal of becoming a ‘multi-molecule operator’. Its SLBs, by contrast, focus on Scope 1 + 2 emissions and limited Scope 3, excluding the far larger emissions from the use of its transported gas – which have been estimated at 100x Snam’s operational emissions.
Recent KPI performance has improved notably: Snam has already achieved its 2027 Scope 1 + 2 target. The SLBs referencing more ambitious targets under the 2021 framework have underperformed in secondary markets over the past year, suggesting the market is efficiently pricing the reduced probability of a step-up on those bonds.
Across the curve, transition bonds trade tighter than SLBs, potentially reflecting greater investor appetite for structures that address Snam’s full Scope 3 emissions rather than operational emissions alone.
