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Industry roundup: 14 July

Deutsche Bank leads three green bond issues in one week

Deutsche Bank has helped three clients come to market with green bonds in the past week, despite a 40% decrease in green issuance this year. The deals were a €600m bond for Assicurazioni Generali, a €500m bond for NEPI Rockcastle and a US$500m bond for Kimco Realty. 

Green bond issuance has been negatively impacted by the economic disruption caused by the coronavirus pandemic, with new issues amounting to just under US$70bn in the first six months of this year compared with US$125bn in the same period last year. During the pandemic, issuers have been less likely to want to segregate funding to green assets so they can retain a pool of liquidity in case required for the crisis. However, the market has seen a remarkable increase in social and sustainability bonds, particularly from sovereigns looking to raise proceeds to finance policies around the pandemic.

The €600m, 11-year bond from Italian insurer Assicurazioni Generali is the second green bond issued by the company, with Deutsche Bank also having led the first issue last year. The transaction aims to achieve a more balanced maturity profile and reduce interest costs in future years. The issuance of the Group’s second green bond represents another important step in fulfilling the Group’s sustainability commitment.

The €500m, 7-year issue from NEPI Rockcastle, an owner and operator of commercial real estate in Central and Eastern Europe, was the company’s debut green bond. Proceeds from the bond will finance energy efficient green buildings and sustainable resource management.

Finally, Deutsche Bank was joint bookrunner on a US$500m, 10-year green bond from Kimco Realty, the US real estate investment trust. Proceeds will finance green buildings, energy efficient building upgrades, sustainable water and wastewater management and renewable energy development and construction.

 

HSBC completes receivables finance transaction for exporters in Bangladesh 

The Hongkong and Shanghai Banking Corporation Limited (HSBC) in Bangladesh completed its first receivables finance transaction for M&J Group, one of the ready-made garment (RMG) exporters in Bangladesh. 

This proposition has been rolled out in line with HSBC’s own receivables finance model, wherein the customer gets early payment against their deferred term exports from HSBC Bangladesh. Such payment will be under the buyer’s default risk coverage from HSBC offices abroad or other foreign reputable financial institutions. The recent central bank circular paved the way to offer such secured and efficient way of working capital financing. 

“Global trade is undergoing an unprecedented level of disruption," commented Ajay Sharma, regional head of Global Trade & Receivables Finance, Asia Pacific at HSBC. "As maintaining liquidity and mitigating risk have become the primary objectives of corporates, there has been an increased focus on working capital optimisation. Receivables finance as a solution can help businesses unlock liquidity and better manage risks.” 

“We are extremely pleased to partner with HSBC on this first transaction under the proposition which will help us to get benefit at both ends by catering to buyers increased credit terms but with early payment on non-recourse basis,” added Salahuddin Ahmed, managing director of M&J Group. 

 

GRI and SASB collaborate on sustainability standards

The Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) have announced a collaborative workplan. GRI and SASB understand that the sustainability disclosure landscape can appear complicated. For companies that use both standards, the reporting effort can be high. To help address this, the two organisations will collaborate to demonstrate how some companies have used both sets of standards together and the lessons that can be shared. SASB and GRI also aim to help the consumers of sustainability data understand the similarities and differences in the information created from these standards. 

Initially the collaboration will focus on delivering communication materials to help stakeholders better understand how the standards may be used concurrently. GRI and SASB will also develop examples based on real-world reports that demonstrate how the standards can be used together. These resources are planned to be delivered before the end of 2020. It is expected that this can lead to the identification of further collaboration opportunities.

 

SWIFT and CCB Fintech look to bring expertise to the Chinese financial community

SWIFT has signed a memorandum of understanding (MOU) with CCB Fintech, outlining ways in which both parties can collaborate on localising SWIFT expertise for the Chinese financial community in areas of ISO 20022, cross-border innovation and technology transformation. 

CCB Fintech is the wholly-owned subsidiary of China Construction Bank (CCB), one of the largest state-owned banks in China. Only two years since inception, CCB Fintech is already providing core banking solutions, ancillary applications, and consulting services to more than 2,500 institutions, 68% of which are banks.

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