Enel Raises Coupons in Move Affecting About $11 Billion of Bonds
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 23 2024
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Should l Buy ?
Source: Bloomberg
- Enel to raise coupons on sustainability-linked bonds: Enel, an Italian energy company, will increase the coupons it pays investors on sustainability-linked bonds after missing greenhouse-gas emissions targets.
- Penalty trigger and increased payments: Interest payments on €5.75 billion worth of bonds will rise by 25 basis points, affecting about $11 billion in Enel bonds.
- Market impact and climate commitments: The penalty event highlights how the energy crisis is affecting companies' climate commitments and the behavior of sustainability-linked bonds in the market.
- Positive outlook for SLB market: Despite challenges, the penalty trigger is seen as a positive event for the sustainability-linked bond market, showing that ambitious targets can be set and the step-up coupon can benefit investors.
- Difference between SLBs and green bonds: Sustainability-linked bonds differ from green bonds as they do not require proceeds to be used for specific projects but instead penalize companies for missing broader sustainability goals.
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
