A successful month for the GSS SSA Market

In our monthly Sovereign, Supranationals and Agencies (SSA) sustainability newsletter we breakdown the trending ESG trades and themes, helping SSAs get ahead of the latest issues shaping the market.

21 Feb 2024 . 3 min read

We’ve seen a flurry of issuance across all sectors, currencies and labels to kick-off 2024. In January, we saw over £39bn eq. print (21 transactions) in green, social, sustainability / sustainability-linked (GSS/S) format from SSAs.

Primary Market Activity

The European Investment Bank (EIB) began their 2024 funding programme with an 8Y £1bn Sustainability Awareness Bond (SAB). The bond priced at Sterling Over Night Indexed Average (SONIA) MS+40 having achieved 1.3x oversubscription. The International Bank for Reconstruction and Development (IBRD) also came with a GBP transaction this month, a £1.5bn 4Y Sustainable Development Bond (SDB). The bond reached 1.2x oversubscription and priced at UKT+31. CADES successfully raised $4bn through a 3Y Social trade. The transaction received notably strong demand (4x oversubscription) and tightened 3bps from initial price talks (IPTs) to achieve a final spread of Secured Overnight Financing Rate (SOFR) MS+38.

SSA GSS/S Issuance

GSS/S issuance has been especially high in January, (+38% compared to 2023). Green GSS/S issuance (c. $27bn) represents 40% of GSS/S issuance in 2024 year-to-date (YTD) – with a slight lead relative to social and sustainable issuance (28% and 31% respectively). GSS/S issuance in the SSA space is led by Supranationals (41%) followed by Sovereigns (31%) and Agencies/Local Authorities (28%).

SSA GSS/S Supply 2022-2024 YTD

Source: Dealogic (01/02/24)

Global EUR/GBP/USD SSA GSS Issuance

Sovereign: YTD GSS issuance of $21bn, led by green (72%) followed by sustainable (18%) with social issuance behind (9%)
Supranationals: YTD GSS issuance of $28bn, led by sustainable bonds (33%) followed by green (14%) with social issuance lagging (54%)
Agencies/ Local Authorities: YTD GSS issuance of $21.7bn, led by green (23%) followed by social (63%) with sustainable issuance lagging (14%)

SSA Sector Developments

The World Bank successfully priced a 7Y $100m Plastic Waste Reduction-Linked Bond. The bond provides investors with a financial return linked to plastic waste collection credits, plastic waste recycling credits and verified carbon credits
The Monetary Authority of Singapore marked the launch of the Singapore Sustainable Finance Association, a centre for sustainable finance in Asia
The European Commission announced an overall commitment to invest €10bn in sustainable transport connectivity in Central Asia
The OPEC Fund expanded its new commitments to $1.7bn across 55 projects in 2023, a significant year for new commitments for the 48 year-old organisation

Investor Developments

BlackRock announced their acquisition of infrastructure investor Global Infrastructure Partners (GIP), in a deal that brings over $100bn in assets to BlackRock from the large independent infrastructure manager
BNP Paribas AM released their new Global Sustainability Strategy, updating their approach to applying sustainability considerations within their investment process
Fidelity International announced a new focused sustainable investment approach, targeting four systematic themes: nature loss, climate change, strong and effective governance, and social disparities
General Atlantic acquired Actis, a global investor in sustainable infrastructure which creates a combined global investment platform of c.$96bn Assets under Management (AuM)

Government and Regulatory Developments

The European Banking Authority (EBA) has launched a public consultation on draft guidelines on ESG risks. These will set out requirements for institutions for the identification, measurement, management and monitoring of ESG risks
The Global Reporting Initiative (GRI) has published a major update to its biodiversity standard, aimed at enabling companies to publicly disclose their most significant biodiversity impacts, and how they approach management
Texas has announced that the state has banned Barclays from participating as an underwriter in Texas’ municipal bond market as the company failed to respond to request for information about their ESG policies
The US Department of Energy has announced over $250m in investments aimed at decarbonising the industrial sector

Find out more

If you would like to discuss any of the above further, please reach out to our authors:

Manmeet Baryah, Analyst, Climate and ESG Capital Market
Tonia Plakhotniuk, Vice President, Climate and ESG Capital Markets

For further analysis and information on the Secondary Market as well as detail of the latest SSA GSS/S private placements, take a look at the full monthly newsletter on Market Insights. If you do not have access to Market Insights, please contact us here. Also, for any unfamiliar terms used within this article please refer to our insights glossary.

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