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Debt Capital Markets
Promoting Global Primary Market Issuance
LSE plc
31 October 2019
Contents
1. Trends in Global Debt Capital Markets
2. London’s Primary Debt Listing Markets
3. London Stock Exchange’s Sustainable Bond Market
4. Where Can You Find Us… Q4 and 2020
5. Your LSEG team
Trends in Global Debt Capital
Markets: Q3 2019
4
Global Macro and DCM DynamicsGlobal DCM Issuance YTD is the lowest since 2015
The Fed & ECB loosened monetary policy further in September 2019, while
BoE kept rates unchanged
Key Events Calendar: Oct to Dec 2019
Date Event
14 Oct Export/Import
14 Oct Treasury Budget
15 Oct CPI
15 Oct Unemployment
16 Oct CPI
24 Oct Monetary Policy
30 Oct FOMC
1 Nov Unemployment
Date Event
7 Nov Interest Rate
8 Nov Export/Import
8 Nov PPI
13 Nov PPI
14 Nov GDP
11 Dec FOMC
12 Dec Monetary Policy
19 Dec Interest Rate
Despite strong issuance in September, Global DCM activity continues to slow down in 2019 Annual Supply by Quarter
Global negative yielding debt close to $14tn at the end of Q3
Source: Bloomberg, FactSet, Dealogic, October 2019
3.02 3.20 3.16 2.80
3.15 3.03 2.962.46
3.05 2.88 2.73
2.11
2.54 2.66 2.51
0
2
4
6
8
10
12
2016 2017 2018 2019
Vo
lum
e (
$ t
rillio
n)
Q1 Q2 Q3 Q4
-0.10%
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19
Federal Funds rate (Upper bound)ECB Deposit Facility RateBoE Bank Rate
-
4.0
8.0
12.0
16.0
Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19
5
Breakdown of LSE Debt Issuers by region, 2.5 years post-referendum Breakdown of LSE Debt Issuers by region, 2.5 years pre-referendum
60%15%
15%
7%
3%
United Kingdom
Europe ex UK
Americas
APAC
GCC
Africa
45%
18%
18%
10%
7%
2%
United Kingdom
Europe ex UK
Americas
APAC
GCC
Africa
Source: Dealogic, September 2019
— Since the vote to leave the EU, international issuers have delivered a vote of confidence in London’s capital market with the proportion of non-UK issuers increasing from 40% to 55% by capital raised
— Contrary to the popular narrative, European issuers (excluding UK) have increased the amount of capital they raise in London with a London listing enabling issuers to tap internationally-focused investors
— In this time period, we have also seen the amount raised in London remained unaffected post referendum
— London Stock Exchange has prepared an impact assessment in case of a Hard Brexit scenario
London’s International Issuer BaseIssuers deliver vote of confidence in London
0
100
200
300
400
500
600
2014 2015 2016 2017 2018 2019 YTD
$ b
illio
n
Pre-referendum Post-referendum
No shift post referendum
EUR 550m, 1.35%, 6Y
September 2019
Main Market
EUR 650m, 0.50%, 6Y
September 2019
Main Market
CNY 140m, 3.4%, 5Y
September 2019
Main Market
GBP 500m, 1.5%, 5Y
September 2019
Main Market
EUR 500m, 0.37, 10Y
September 2019
Main Market
Corp
ora
tes +
FIG
S
overe
igns &
Supra
nationals
USD 4.0bn, 3.12%, 30Y
USD 3.0bn, 2.5%, 10Y
USD 3.0bn, 2.12%, 5Y
September 2019
Main Market
EUR 1.0bn, 0.58% 10Y
August 2019
Main Market
USD 500m, 2.50%, 50Y
July 2019
Main market
EUR 650m, 1.5%, 15Y
EUR 500m, 0.6%, 7Y
September 2019
Main Market
USD 1.75bn, 2.1% 3Y
July 2019
Main Market
EUR 2.0bn, 2.0%, 20Y
EUR 1.0bn, 0.75%, 8Y
July 2019
Main Market
USD 700m, 1.62%, 5Y
Green bond
September 2019
Main Market
GBP 225m, 1.37%, 5Y
Supranational
September 2019
Main Market
EUR 500m, 0.0%, 7Y
Supranational
September 2019
Main Market
USD 700m, 1.63%, 5Y
Green Bond
September 2019
Main Market
EUR 500m, 0%, 7Y
Green Bond
September 2019
Main Market
GBP 350m, 2.25%, 16Y
Green Bond
September 2019
Main Market
GBP 25m, 0.91%, 1Y
SONIA Linked
July 2019
Main Market
GBP 1bn, 1.29%, 5Y
SONIA Linked
September 2019
Main Market
Gre
en B
onds &
SO
NIA
EUR 500m, 0.15%, 15Y
Green Bond
September 2019
Main Market
GBP 8m, 1.56%, 5Y
SONIA Linked
August 2019
Main Market
USD 500m, 3.75%, 10Y
September 2019
Main Market
SEK 500m, 0.17% 5Y
September 2019
Main Market
USD 500m, 4.00%, 30Y
September 2019
Main Market
GBP 1.0bn, 6.38%
Perpetual
September 2019
ISM
EUR 1.0bn, 0.63%, 10Y
September 2019
Main Market
EUR 600m, 0.01%, 7Y
September 2019
Main Market
GBP 600m, 5.88%
Perpetual
September 2019
ISM
Source: London Stock Exchange, Dealogic, October 2019
Key Q3 2019 IssuancesA diverse range of issuers and products
London’s Primary Debt
Listing Markets
8
Main Market International Securities Market
Applicable Regulation EU Regulated Market MTF Market
Reviewer UK Listing Authority London Stock Exchange
Listing Documents Full prospectus Admission Particulars
Designation Professional & Retail Professional only
Disclosure Obligations PD/MAR/TD LSE ISM Rulebook/MAR
Green Segments Dedicated green segments available Dedicated green segments available
Prestige of listing on a regulated market in
London, a global financial centre
Streamlined and customer centric admission
process with direct contact with LSE
A Choice of Debt MarketsEfficient and convenient listing process
9
UKLA
Confirmation
Letter
Listing Bonds on LSEAn Efficient and Expedient Process
Admission to
Trading on
ISM
LSE
ISM
Eligibility
Confirmation
Letter
Submit
documentation
directly to LSE
LSE guarantees turnaround of
3 days for initial comments
and 2 days thereafter
Pre-admission requirements
⎯ Final form 1
⎯ Sanctions confirmation
⎯ Admission particulars (to be
received 1 day before
admission)
Admission to
Trading on
Main Market
UKLA
LSE
Ma
in M
ark
et
Submit
documentation
concurrently to
UKLA and LSE
UKLA – approves
admission to
Official List
LSE – approves
admission for
trading
UKLA guarantees turnaround
of 4 days for initial comments
and 2 days thereafter
Pre-admission requirements
⎯ Final form 1
⎯ Sanctions confirmation
⎯ Prospectus (to be received 1
day before admission)
10
112 bonds
listed on London’s
International
Securities Market
(ISM)
16 countries
Diverse global
reach
£28.9 billion
Money raised on
International
Securities Market
46 issuers
Sovereigns and
corporates
Source: London Stock Exchange Data, October 2019
*Sector and region graphs are based on the capital raised
Across multiple continents (£bn)* ISM Issuance
— £28.9 billion has been raised on ISM since
its launch, 55% of which was raised in 2019
— Q3 2019 saw £6.5 billion raised, 1.3x more
than 3Q18
— ISM is home to 19 programmes from
issuers from across the world, including 3
sovereigns – Chile, Sri Lanka and Fiji
— An ISM admission can ensure those
issuers who wish to maintain consistency
with regards to the drafting of Risk Factors
for their Eurobond programmes with their
global programmes can choose to do so
— Base prospectuses can be used to issue
the full range of structured and complex
bonds without the requirement to publish a
drawdown prospectus or change terms and
conditions
— ISM rules allow issuers to benefit from a
simplified disclosure regime utilising
reduced disclosure for any issuer with any
security admitted to any market deemed
suitable by the Exchange.
Benefits of ISM in relation to PD III:
14.5
10.1
2.9
0.7 0.4
APAC Europe Americas ME Africa
0
5
10
15
20
25
30
35
0
1
2
3
4
5
6
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019
No
. o
f D
eals
To
tal
Cap
ital R
ais
ed
(£b
n)
Total Capital Raised (£bn) No. of Deals
ISM Continues to GrowDeals across sectors, geographies and IG/HY
Launch of Sustainable Bond
Market
12
Our Sustainable Finance offering for issuers is based on four key pillars:
1. Access to capitalAccess to markets representing the largest, most sophisticated and long-term
orientated investor base for green & sustainable business and infrastructure in
the world as well.
• 48.4% of global green and
sustainable assets are managed
out of Europe*
2. Profile and
visibility
We champion sustainable business and sustainable finance capital raising
structures.
• the first to introduce a Green Bond segment and
• the first in the world with a ‘Green Economy classification’
• the first to introduce a Transition bond
• ICBC raised $1.7bn in 2019, on of
the largest green bond issuances
in 2019
• >$6bn raised by listed green funds
3. Issuer service
tools and insights
We provide guidance and support to issuers helping them to improve their
dialogue and engagement with investors
• ECM updated distributes to >2,000
contacts
• >700 visitors attending events
• >200 market opens annually
4. A world class peer
group
Our markets are the premier global hub for sustainable investment and finance
Our issuers benefit from being part of a comprehensive and integrated
sustainable finance centre
• >200 listed green, social and
sustainable bonds raising $34bn
• >20 green funds with an aggregate
market cap of $8bn
• >100 listed green companies
*Global Sustainable Investment Alliance (2018)
https://www.bloomberg.com/graphics/2019-green-finance/
We support issuers in accessing global pools of long-term orientated capital to support sustainable growth, through a
market place where strong governance and high quality disclosure are promoted.
Innovation in green and sustainable funding structures are supported by pioneering new concepts.
Sustainable Finance PropositionLondon’s central role in facilitating sustainable long-term growth
13
Access to capital | Profile & Visibility | Issuer Tools & Insights | World Class Peer Group
• Available to equity issuers with meaningful exposure
to the Green Economy
• 50%+ revenues generated from business activities
within FTSE Russell’s Green Revenue Taxonomy
• FTSE Russell coverage or self-identified
• No additional cost to issuers
• Raises visibility to investors
• Peer group events & services
• Provides insight into the market dynamics of the low-
carbon transition
Green Economy Classification & Mark
Championing Green Economy IssuersEnabling investors identify investible “green economy” equities
14
Following a market consultation, London Stock Exchange has enhanced its debt offering in
sustainable finance with the launch of Sustainable Bond Market (SBM)
Issuer-level Classification Eligibility Criteria2
• If an issuer is equity listed on a market operated by the Exchange, they will be required to be Green
Economy classified; and
• Eligible issuers will be required to have a Green Revenue score of greater than or equal to 90% at the
time of application.
New Social, Sustainability and Issuer-Level Segments join Green
Segment to create Sustainable Bond Market
• Distinct segments for use-of-proceeds instruments such as green bonds, social bonds, sustainability
bonds, and issuer-level classified bonds, based on objective criteria
• For green, social and sustainability bonds admitted to SBM, issuers will be required to provide London
Stock Exchange with an acceptable independent external review assessing the security’s adherence
to eligible relevant international principles
1
Mandatory Post-Issuance Reporting
• Issuers admitting bonds to SBM must comply with mandatory annual post-issuance reporting
requirements to demonstrate continued eligibility to SBM over the lifetime of the issuance.
3
Launch of Sustainable Bond MarketEnhancing London’s leadership in supporting Sustainable Finance
1515
£34bnTotal money raised
through these issuances
Sustainable Bond Market
Issuer-level Classification
Bonds by issues whose core
business activity is aligned
with the green economy.
Eligibility determined by
specific criteria set by London
Stock Exchange.
Certified Use of Proceeds
Independent external
review: Second Opinion
Third Party Verification
aligned with ICMA
Principles or other eligible
standards.
Green
The proceeds will be
exclusively applied
to finance projects
with clear
environmental
benefits.
Sustainability
The proceeds will be
exclusively applied to
finance a
combination of both
Green and Social
projects.
Social
The proceeds will be
exclusively applied to
finance in part or in full
new and/or existing
eligible Social
Projects.
200+Debt securities admitted
to Sustainable Bond
Market1
14Bonds in 14 unique
currencies
18Issuers from 18 different
countries
Sustainable Bond Market StructureDistinct segments for Use of Proceeds and Issuer-level classification
16
209Active bonds
admitted to SBM
are listed in London
£34bnTotal money raised from
green issuances
55Unique bond issuers
14Unique currency
denominations
Source: Bloomberg, October 2019
*Based on social, sustainable and issuer-certified bond issuances on London Stock Exchange
Data includes active and matured bonds. All duplicate bonds are consolidated
Sustainable Bond Market issuance for the last six years
Sustainable Bond Market breakdown*
London’s Sustainable Bond MarketAn international market for sustainable finance instruments
4
14
31
3936
32
0
5
10
15
20
25
30
35
40
45
0
2
4
6
8
10
2014 2015 2016 2017 2018 2019 YTD
No
. of B
on
ds
Cap
ita
l R
ais
ed
(£
bn
)
Green Issuer Level Classification Social Sustainability No. of Bonds
48%
15% 11%
8%
2%2%
14%
Utilities
Supranationals
Government Local
Banks
Power Generation
Renewable Energy
Other
44%
17% 16%
13%
2%
8%
GBP
EUR
SEK
USD
INR
Other
17
Where Can You Find Us?
(Q4 Events)
18
LSEG Sustainable Finance Summit:
• London Stock Exchange hosted a Sustainable Finance Summit on 11 October 2019, launching a number of initiatives on the Green Economy Mark, Sustainable Bond Market, ESG Disclosure Score and a guide to green finance. More information on the event can be found here
Conference Date Location
LSEG Annual China Conference 23 October Beijing, China
LSEG Annual Israel Conference 25 October Tel Aviv, Israel
Nordics Capital Markets Day 4 November London, UK
ICMA Primary Markets Forum 14 November London, UK
Oxford in the City 21 November London, UK
Euromoney CEE Forum 14 - 15 January
2020Vienna, Austria
ICMA India Securities Summit Q1 2020 London, UK
LSEG UK DCM Conference 6 March 2020 London, UK
Bonds, Loans & Sukuk Africa 20209 - 11 March
2020Cape Town, South Africa
Bonds, Loans & Sukuk Middle East
2020
24 - 25 March
2020Dubai, UAE
London Stock Exchange Events Calendar Q4 2019 and Q1 2020 & Thought Leadership
19
Your LSEG Team
Dr. Darko Hajdukovic
Head of Multi-Asset Primary Markets
and Investment Funds
+44 20 7797 3306
Omair Mohyal
Fixed Income Relationship Manager
+44 20 7797 3913
Global Sales & Relationship Management
Alex Imseeh
Fixed Income Senior Associate
+44 20 7797 3750
N. America, Europe & India
Sarah Ellena
Manager, Fixed Income & Funds
+44 20 7797 3872
Latin America, China & Japan
Elena Chimonides
Fixed Income Product Manager
+44 20 7797 1509
Product Development & Innovation
Federica Giacometti
Fixed Income Associate
+44 20 7797 1392
UK, Middle East & Asia Pacific
Shrey Kohli
Head of DCM & Funds
+44 20 7797 4313
David Ashaolu-Coker
Fixed Income Associate
+44 20 7797 4633
UK & Africa
21
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