In the context of option pricing and financial materiality, we think a more meaningful coupon adjustment would have enhanced the structure. Because of the small size of the step-up/down, we see very limited potential for optionality being priced at issuance based on our option pricing approach. Therefore, we think it is likely the bond will price broadly in line with the yield curve.
The issuance in local currency supports domestic capital market development, which is important for emerging economies. The previous issuance of sustainability bonds indicates a sufficiently deep capital market and domestic demand for such instruments.
