At the time of writing, neither step-up has been reflected in Bloomberg bond data. Given the misses are confirmed, the impacted SLBs would be expected to outperform vanilla securities as the market prices in the higher coupons. Current spreads suggest the bonds are trading broadly in line, though the EUR SLB has shown some outperformance since early March alongside broader market tightening.
This is a further example of the SLB step-up mechanism working as intended — providing investors a hedge against sustainability underperformance. As the market becomes more efficient at pricing these options, ambitious issuers can expect tighter pricing at issuance.
