Any forthcoming Eni bond issuance that fully aligns with the sustainability KPIs would be an important step in towards driving more ambition into the SLB market. So far, despite the overarching issuer KPIs, the specific Eni SLB instrument has not included Scope 3-related sustainability performance targets (SPTs). We believe that Scope 3 SPTs will highlight enhanced impact opportunity and should drive beneficial pricing.
There is substantial pressure in cash bond markets which normally leads to issuers having to issue new bonds at substantial premiums to secondaries. Add to this a particular dynamic around Italy, and one would expect any issuance to come at a substantial new issue premium (NIP). Indeed, we see this as an opportunity to apply the option-pricing approach presented in earlier AFII papers to drive both ambition of SPTs as well as the opportunity to lower cost-of-capital for the issuer.