PR or Pivot? Investors Snap Up Green-Bond Offerings From Gulf - Bloomberg:
In a region known for oil wells, tankers and sprawling natural-gas plants, green bonds might raise some eyebrows.
But when Saudi Electricity Co. and Qatar National Bank sold notes this month designed to fund projects including environmentally friendly buildings, smart meters and infrastructure for distributing renewable power, investors piled in.
“If you have an ESG mandate and are looking for a yield pickup in a name with a phenomenally strong balance sheet, then you would be willing to buy,” said Patrick Esteruelas, head of research at Emso Asset Management in New York. “The combination of public-relations benefits and the opportunity to tap a growing pool of capital means there will be a significant increase in green-bond issuance.”
In the Gulf, the decline in oil prices that was fueled by the coronavirus pandemic served as a reminder of why nations need to diversify their economies away from energy exports. While not everyone is convinced that the environmental, social and governance, or ESG, bonds go much beyond good PR, the global rush for placements means more issuance from the region is a given.
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