{"id":90537,"date":"2020-04-06T01:19:29","date_gmt":"2020-04-05T23:19:29","guid":{"rendered":"http:\/\/beta.next-finance.net\/opinion\/social-bond-market-responds-to-the-coronavirus-crisis\/"},"modified":"2020-04-06T01:19:29","modified_gmt":"2020-04-05T23:19:29","slug":"social-bond-market-responds-to-the-coronavirus-crisis","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/opinion\/social-bond-market-responds-to-the-coronavirus-crisis\/","title":{"rendered":"Social bond market responds to the coronavirus crisis"},"content":{"rendered":"<p>We have already started to see a trend from the supranational community, with more than $7<br \/>\nbillion of debt[[Data from Bloomberg, March 2020]] issued in the past three weeks in the guise of the IFC Social Bond, IADB<br \/>\nSustainability Bond, African Development Bank Social Bond and the Nordic Investment Bank<br \/>\nResponse Bond. In aggregate, these will support products and services contributing to health<br \/>\nconditions and maintaining living standards for communities impacted by Covid-19, and we are<br \/>\nparticularly pleased to have supported them in the Threadneedle (Lux) European Social Bond<br \/>\nFund:<\/p>\n<ul>\n<li> <strong>IFC Social Bond<\/strong> The World Bank Group, of which IFC is a constituent, will help<br \/>\ndeveloping countries strengthen health systems, including better access to health<br \/>\nservices to safeguard people from the epidemic, strengthen disease surveillance, bolster<br \/>\npublic health interventions, and work with the private sector to reduce the impact on<br \/>\neconomies.<\/li>\n<li> <strong>IADB Sustainability Bond<\/strong> The IADB is offering up to $2 billion in resources that can be<br \/>\nprogrammed to countries requesting support for disease monitoring, testing and public<br \/>\nhealth services, as part of its coordinated efforts to fight the Covid-19 outbreak.<\/li>\n<li> <strong>African Development Bank<\/strong> The proceeds of these bonds will be allocated in line with<br \/>\nthe ADB\u2019s social bond program to provide support and financing to countries and<br \/>\nbusinesses fighting against Covid-19.<\/li>\n<li> <strong>Nordic Investment Bank<\/strong> Loans financed by NIB Response Bonds will support the provision of products and services contributing to health conditions and maintaining living standard for groups challenged by the Covid-19. More specifically, loans will target the financing of small and medium-sized enterprises which have been impacted by the virus,<br \/>\nand large companies in the medical equipment and healthcare sector facing an increasing demand for equipment or services related to the pandemic.<\/li>\n<\/ul>\n<p>The issues these specific-use-of-proceeds bonds will tackle fall within the ICMA Green and<br \/>\nSocial Bond Principles and target healthcare, access to finance for small businesses,<br \/>\nemployment and longer-term green infrastructure projects among others.<\/p>\n<p>The current crisis also provides an impetus to widen the scope from green to social and<br \/>\nsustainability bonds. For example, IFC has been issuing social bonds since 2017, raising $1.46<br \/>\nbillion across 28 bonds as at 31 December 2019[[IFC, Social Bond fact sheet, November 2019]]. Their latest social bond this month is a $1<br \/>\nbillion issue[[Global Capital, IFC brushes off vol with impressive social bond, 11 March 2020]], thus almost doubling its social bond book overnight.<\/p>\n<p>The global coronavirus pandemic continues to make these unique times in which to operate, but<br \/>\nwe are doing so as normally as possible. Beta has been falling, but with spreads much wider we<br \/>\nare minded to add to it. Asset allocation favours credit at these levels. Our main focus, however,<br \/>\nhas been on liquidity management and cash is now up over 5.5%.<\/p>\n<p>Yield on the European Social Bond Fund is less than the benchmark[[ICE BofA Euro Non-Sovereign ICE \/ BofA Euro Corporate Euroland Issuers]], we are overweight utilities,<br \/>\nagencies and supranationals, and we are slightly overweight duration \u2013 but have a curve position<br \/>\nthat would benefit from a flattening of yield curves value.<br \/>\nTurning to the market, it is illiquid and difficult but we have managed to add to positions and<br \/>\nfound the following firms attractive:<\/p>\n<ul>\n<li> <strong>Carrefour<\/strong> This French supermarket has established market-leading coronavirus<br \/>\nmeasures such as priority checkouts, special timeslots for healthcare workers and<br \/>\nvulnerable groups, a new telephone ordering service with free home delivery, and an<br \/>\nonline express delivery service.<\/li>\n<li> <strong>DLR Green Bond<\/strong> This is the first data centre real estate investment trust (REIT) to<br \/>\nissue a green bond. We like it because it is enabling essential communication and<br \/>\neconomic activity (especially relevant during a lockdown) in a more environmentally<br \/>\nfriendly way.<\/li>\n<li> <strong>TenneT Green Bond TenneT<\/strong> provide transmission and distribution infrastructure which<br \/>\nis an essential component of moving to a low carbon economy <\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The coronavirus outbreak is a social issue that threatens the well-being of the world\u2019s population. With ther ICMA Social Bond Principles published in 2017, the past few years has seen the bond market develop products that address social issues, with $59 billion issued to date[[Data from Bloomberg, March 2020]]. It therefore stands ready to support the financing of projects aimed at addressing the Covid-19 threat. <\/p>\n","protected":false},"author":1,"featured_media":90535,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1480],"tags":[1859,1854,1849,1671,1826,1682,1651,1437,2148,1452,2103,1685],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/90537"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=90537"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/90537\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/90535"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=90537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=90537"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=90537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}