24/04/2025
4 minute read
In its 2024 report, Italian utility A2A announced it had fallen short of its installed renewable energy target, triggering a step-up to its 1.5% 2028 Sustainability-Linked Bond (SLB).
AFII unpacks the implications of the 25bps step-up, and evaluates how the market anticipated, and then priced, this event.
Our analysis implies that the SLB market is becoming more efficient. Evidence ahead of the report’s publication suggested the target would likely not be achieved, and it appears the market was pricing in at least some of this probability before the target observation date.
As more SLBs approach their observation dates, AFII anticipates the market will become increasingly sensitive to data related to target performance.
Seven out of 24 large SLBs analysed are predicted either likely to miss their sustainability targets or the result is 50:50.
Italian utility debuts first security aligned with EU Green Bond Standard
Heathrow and Gatwick exhibit contrasting approaches for SLB-supported decarbonisation
The green bond market is starting to develop in India.
Analysis on structures and pricing of SLBs using social targets
We discuss Nordea's innovative Sustainability-Linked Loan structure
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