At first glance, bank capital is not an ideal asset class for green investors.
While debt finance can be raised from investors in ESG funds and allocated to projects with specific environmental, social or governance criteria, capital is more fungible. It is typically not passed through on a back-to-back basis to support specific green risk-weighted assets.
Until recently.
BBVA paid a coupon of 6% on the first-ever green AT1 deal in July, a €1 billion, non-call five-and-a-half year offering.
It is an historic deal that shows the growing influence of ESG funds
David Marks, JPMorgan
At issuance, BBVA communicated a total portfolio of €2.9
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