London Stock Exchange declares $3bn green bond to be designated to its Sustainable Bond Market
The dominating global hub for sustainable finance, the London Stock Exchange is welcoming $3 billion in green bond listings over a one-hundred-year period from the Public Investment Fund (PIF), the first to be supplied by a sovereign wealth fund.
The London Stock Exchange (LSEG) takes on the Public Investment Fund’s (PIF) initial green bond to be supplied by the sovereign wealth fund on the Sustainable Bond Market (SBM). For PIF, it’s the first of its kind and will be paid over three tranches in the years 2027, 2032 and 2122. The green bond listing will be displayed on the London Stock Exchange’s SBM and noticeably, was oversubscribed eight times by investors.
Saudi Arabia’s sovereign wealth fund listing underlines PIF’s dedication to assisting the country’s sustainability agenda. This is shown through the diversification of the economy and its reach of net zero emissions by 2060. Additionally, the 100-year tranche showcases the trust investors have in PIF’s long-term goal and its support of the green agenda. It has also been vocalized that the green bond meets the International Capital Market Association (ICMA) Green Bond Principals 2021.
The Public Investment Fund has established a Green Finance Framework in its assistance of Saudi Arabia’s green agenda. This outlines the projects eligibility for green financial support alongside international standards.
The profits of the disbursement will be used to fund eligible green projects such as investment in renewable energy and pollution control. The ICMA will require an annual report with a break down of the distribution of the proceeds over a yearly period.
Exponential growth has been noticed with regards to the global green bond issuance in comparison to its 2020 statistics, with a percentage incline of 96% which according to Refinitiv is a record high.
PIF made use of LSEG’s digital platform SparkLive Roadshow to generate the attention of global investors as the platform showcases virtual events and communication solutions.
Julia Hoggett, CEO, the London Stock Exchange plc, said:
“We congratulate PIF on becoming the first sovereign wealth fund to list a green bond. Green bonds are critical tools that enable issuers to achieve key sustainability objectives and the issuance reflects PIF’s commitment to contribute to Saudi Arabia’s green agenda. Climate change is the most urgent challenge of our lifetimes and, as the world’s most international financial centre, the London Stock Exchange is at the forefront of enabling capital flows to help fund the just transition to net zero.”
LSEG is in a prime position to be at the core of global capital markets, making them a vital enabler of sustainable economic growth of the green economy. LSEG prides itself in providing solutions mapped around the needs of the collective sustainable finance ecosystem and an example of this being, access to international capital markets for green finance for a wide range of issuers.
The London Stock Exchange is an essential global hub for sustainable finance. Amongst other achievements, it has aided investors and issuers in the transition from low-carbon and sustainable economy from upwards of a decade. Additionally, its SBM is home to an estimate of 300 green, social and sustainability bonds which have raised a combined £120 billion.