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Debt Capital Markets Update
London Stock Exchange
Year in Review 2019
What Lies Ahead 2020
Contents
1. DCM Supply and Trends in 2019
2. DCM Product Development in 2019a) ISM: Strongest year yet
b) Launch of the Sustainable Bond Market (SBM)
c) Issuer Services Flow
3. DCM Events in 2020
4. Your LSEG DCM team
Year in Review 2019 – Global
trends
4
0
2
4
6
8
10
12
14
16
18
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Sto
ck
of n
eg
ativ
e y
ield
ing
de
bt ($
tn)
Yie
ld (
%)
Negative Yielding Debt US 2 Year US 5 Year US 10 Year
Source: Bloomberg, FactSet, Dealogic, December 2019
Global Macro DynamicsYield curves reverts and steepens in Q4 and the stock of negatively yielding debt reduces
5
$10.9
$11.8 $11.8
$11.4
$11.832,751
39,204
38,325
36,980
35,072
28k
30k
32k
34k
36k
38k
40k
10.2
10.4
10.6
10.8
11
11.2
11.4
11.6
11.8
12
2015 2016 2017 2018 2019
No.
of bonds
Volume ($ trillion) No. of bonds
Source: Dealogic, December 2019.
Note: Based on individual tranches issued.
4.1%
- 5.2%
44% 45% 43% 43%49%
23% 21%21% 22%
19%
16% 16% 16% 16%14%
9% 10%9% 10% 11%
3% 4%5% 4%
4%4% 3% 4% 4% 3%1% 2% 2% 2% 1%
2015 2016 2017 2018 2019
CEE, CIS &Turkey
UK
RoW
China & HongKong
APAC & Australia
Nordics &Western Europe
North America &Canada
Aggregate global bond volumes ($ trillion) and deal count Aggregate global bond volumes (by capital raised) – regional
breakdown by issuer geography
Global DCM Dynamics (1/4)
Drop in deal count, but more capital raised. Increase in US & China’s share
6
Source: Dealogic, December 2019
$2.54
$2.66
$2.53
$2.63
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
2016Q4 2017Q4 2018Q4 2019Q4
Volu
me (
$ trilli
on)
Sub-Saharan &Northern Africa
Middle East
India & South EastAsia
Latin America &Carribbean
CEE, CIS & Turkey
UK
China & Hong Kong
Nordics & WesternEurope
APAC & Australia
North America &Canada
$3.02 $3.20 $3.16 $3.20
$3.15 $3.03 $2.96 $3.05
$3.05 $2.88$2.73
$2.96
$2.54 $2.66$2.53
$2.63
11.76 11.78 11.38
11.85
0
2
4
6
8
10
12
2016 2017 2018 2019
Vo
lum
e (
$ t
rill
ion
)
Q1 Q2 Q3 Q4
After a relatively flat H1 2019, H2 issuance increases total capital
raised
North America & MEA drove growth, with other regions down in Q4
Global DCM Dynamics (2/4)
Stronger Q3 and Q4 lift capital raised with North America driving issuance
7
Number of listed bonds and capital raised on global exchanges decreases
$7.93
$7.26 $7.19
$6.45
22,693
24,187
23,842
21,345
19,000
20,000
21,000
22,000
23,000
24,000
25,000
0
1
2
3
4
5
6
7
8
2016 2017 2018 2019
No
. of b
on
ds
Vo
lum
e (
$ t
rill
ion
)
Capital raised - Listed No. of bonds - Listed
Source: Dealogic, December 2019.
Note: Based on individual tranches issued.
- 10%
- 11%
Global DCM Dynamics (3/4)
Listed bonds down, both by number of deals and capital raised
8
$7.5
$2.4
$3.9
$12.3
$11.2
2015 2016 2017 2018 2019
Global DCM Dynamics (4/4)
Stronger Sterling, off-shore Chinese and GSS issuance
Off-shore RMB Bond issuance ($bn equivalent) Sterling Denominated Global Bond issuance (£bn)
Off-shore issuance by Chinese Issuers ($bn equivalent) Global Green / Social / Sustainable Bond issuance ($bn)
Source: Dealogic, Climate Bond Initiative, December 2019
£55 £54 £66£84 £78
£106£31 £31
£31£34 £36
£48
£30 £26£32
£44£33
£44
2014 2015 2016 2017 2018 2019
Finance Government Corporates
$125$115
$126
$241
$189
$231
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019
USD CNH EUR Other currencies
$42
$87
$162 $171
$231
2015 2016 2017 2018 2019
+41%
CAGR
35%
22%
9
$6.8
$10.1
$13.6
$18.3
$22.9
$30.0
$35.0
2008 2010 2012 2014 2016 2018 2020 (est.)
14%
CAGR
Global Assets Under Management that incorporate ESG (USD
Trillions)
Sources: EuroSIF SRI studies 2003-10; Global Sustainable Investment Alliance’s Global Sustainable Investment Review 2012-16; Opimas 2018
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0
10
20
30
40
50
60
70
80
90
100
2006 2008 2010 2012 2014 2016 2018
No
. o
f sig
na
tori
es
AU
M U
S$T
rn
Assets under management (US$ trillion)
Number of AOs
Number of Signatories
UN Principles for Responsible Investment: Growth in no. of
Signatories and associated AUM 2006-2018
Growth in ESG Strategies for InvestorsInvestors are increasingly pursuing ESG strategies
Year in Review 2019 –
Exchange trends
11
Abu Dhabi’s
sovereign bond
raises $10bn, the
largest sovereign
bond on London
Stock Exchange in
2019
ISM’s Rulebook
updated to include
MAR 17
incorporation by
reference and
Insurance Linked
Securities
Inaugural Debt
Capital Markets
Forum 2019
hosted at London
Stock Exchange
Feb
Saudi Aramco lists its
programme on Main Market and
prices its inaugural $12 bn
issuance
Yorkshire Water launches first
£-denominated sustainability
bond
KIIFB issues India’s first sub-
sovereign masala bond
Prospectus Regulation
changes introduced, including
Professional Only segments for
smaller denominations and
LSE.com able to accommodate
documents
Chile issues green
bonds on ISM –
the first sovereign
green bonds from
the Americas
ICBC becomes the
first Chinese bank
to issue a £-
denominated
bond
Host the Sustainable
Investment Summit
and launch
Sustainable Bond
Market (SBM)
LSEG nominated to
Advisory Council of
GBP / SBP Executive
Committee
China lists
EUR
Sovereign
Bonds on ISM
RBS issues
first social
bond by a UK
bank on SBM
Mar Apr June July Aug Sep Oct Nov
100th bond
admitted on ISM
Consultation
launched on
developments to
its sustainable
finance offering
Roundtable on
Sustainable
Bond Market
and climate
transition
bonds
May
AIIB issues its first
benchmark bond
on Main Market
Guidance
published on
continued ECB
eligibility of
London listed
bonds through
admission to MTS
BondVision
Hong Kong SAR
issues its first
green bond on
Main Market
LSE plc
hosts
ICMA’s
Primary
Markets
Forum 2019
Dec
IFC issues
world’s first
Bangladeshi
Taka bond
QNB issues
first masala
bond from
Middle East
FLOW,
powered by
Nivaura,
launched for
Client Beta
testing
LSEG leads
fundraising round
in Nivaura, along
with A&O,
Santander and
Linklaters
LSE plc DCM Year In ReviewKeeping Busy in 2019
12
Source: Dealogic, London Stock Exchange, December 2019
• New dedicated segments for social and
sustainability bonds
• New Issuer-Level Segment for bonds by
issuers whose core business activity is
aligned with green economy
• Mandatory annual post-issuance
reporting requirements
New Sustainable
Bond Market
(SBM) Launch
Switches to
LSE’s Markets
• London Stock Exchange admitted 1,636
new transactions into its Main and MTF
markets raising over £334bn equivalent
from 226 issuers, in 36 currencies and
from 42 countries
• 41 new bonds admitted to the SBM
market, raising over £11bn equivalent
1,636 bonds admit
through Main
Market and ISM
London Stock Exchange saw multiple debut
and landmark transactions including:
• Saudi Aramco’s inaugural listed bond
• Hong Kong’s first green bond
• India’s first sub-sovereign masala bond
• The first sovereign green bond from the
Americas issued by Chile
• China’s first EUR denominated bond
• AIIB’s first benchmark bond
Milestone
Transactions
• Flow has been designed to give dealers
and issuers full control and transparency
of the MTN transaction execution
process
• Efforts were concentrated on developing
the platform and finalising UAT testing
with the aim to launch with the first
Private Placement deal in 2020
Issuer
Services
Flow
• Money raised on ISM for 2019 (£23.7bn)
is up 127% from 2018
• £36.6 billion has been raised on ISM
since its launch, 64.5% of which was
raised in 2019
• Q4 2019 saw £7.9 billion raised, 3.8x
more than 4Q18
131 bonds listed
on ISM raising
over £36bn
30+ A number of high profile corporates and
sovereigns have added London listing or
moved their listing to London since the
launch of ISM. Some from 2019:
• The MOF of the Republic of China
• The Republic of Sri Lanka
• Ukraine Exim Bank
• Oil India Limited
• The Kingdom of Morocco
• ICBC, Dubai branch
Key Highlights from 2019 (1/2)
Innovating in debt financing
13
Source: FactSet
Bonds with multiple tranches do not include coupon and tenor details
RBC inaugural green bond
€500mn (0.25%, 5Y)
Well Fargo Bank
R200mn (8.18%, 7Y)
IFC first ever Taka bond
Tk800mn (6.3%, 3Y)
North America
Republic of Chile green bond
$1.4bn, €861mnn
CAF first euro green bond
€750mn (0.63%, 7Y)
Latin America Africa
Morocco
€1bn (1.5%, 12Y)
Republic of Kenya
$4.1bn
Standard Bank Group
$400mn (5.95%, 10Y)
Standard Chartered
Sustainability bond
€500mn (0.9%, 8Y)
Yorkshire Water
Sustainability bond
£350mn (2.75%, 22Y)
United Kingdom
Nordics
Akademiska green bond
SEK1.5bn
Iceland
€500mn (0.1% 5Y)
Sweden
$2bn (2.5%, 3Y)
Western Europe
OeKB
£1.5bn (1.625%, 3Y)
Attica Bank
€320mn (6.596% 3Y)
Coca-Cola HBC
€500mn (0.625%, 10Y)
CEE, CIS & Russia
Republic of Serbia
€1.55bn (1.5%, 10Y)
Ukreximbank
$100mn (9.95% 10Y)
Petropavlovsk
$125mn (8.25%, 5Y)
Greater China
China PRC
€4bn
ICBC
£600 (1.5%, 3Y)
AIIB debut bond
$2.5bn (2.25%, 5Y)
Australia & NZ
Westpac Banking Group
$2bn (3.125%, 5Y)
CBA
€1bn (0.875%, 10y)
India & S. Asia
Muthoot Finance
$450mn (6.125%, 3Y)
KIIFB debut masala bond
₹50bn (9.723%, 5Y)
DS Republic of Sri Lanka
$2bn
Key Highlights from 2019 (2/2)
Global reach of London Stock Exchange Markets
Middle East & Israel
Saudi Aramco debut bond
$12bn
State of Israel
€1.25bn, €500mn
KSA
$3bn
Abu Dhabi
$10 bn
QIIB
$500mn senior Sukuk
$300 mn AT1 Sukuk
— 897 bonds were issued on London Stock Exchange during 2019; $377.4bn in debt capital were raised.
London Stock Exchange bonds: 2015 to 2019 Bonds/Capital Raised across select exchanges 2018 vs. 2019
Source: Dealogic, as of December 2019
Note: Based on individual tranches issued.
$856
$425$360
$188
$902
$377 $382
$213
2,149
862
1654
538
2144
897
1359
577
0
400
800
1200
1600
2000
-
200
400
600
800
1,000
Luxembourg London Dublin Singapore
No
. o
f b
on
ds
Cap
ital ra
ised
($b
n)
Capital raised 2018 ($bn) Capital raised 2019 ($bn)
No. of bonds 2018 No. of bonds 2019
$453
$411 $405$429
$377
738
826
739
863897
0
100
200
300
400
500
600
700
800
900
-
50
100
150
200
250
300
350
400
450
2015 2016 2017 2018 2019
No
. of b
on
ds
Cap
ital ra
ised
($b
n)
Capital raised ($bn) No. of bonds
Debt Listings By Exchange2019 comparison across selected global exchanges
15
Currencies (by number of bonds) Currency split (by monthly capital raised)
Geography (by capital raised)
Source: London Stock Exchange, December 2019
Based on individual tranches issued.
Tenor (by capital raised)
33% 34%
29% 30%
19% 17%
4% 4%2% 3%2% 2%
11% 11%
2018 2019
Other
TRY
CNY
SEK
EUR
USD
GBP
52% 47%
18%
15%
14%
11%
3%
11%
7%6%
4%4%
2018 2019
Latin America &Carribbean
CEE, CIS & Turkey
India & South East Asia
China & Hong Kong
Sub-Saharan & NorthernAfrica
APAC & Australia
Middle East
North America & Canada
Nordics & Western Europe
UK
20% 18%
18% 21%
22% 23%
9% 9%
19%21%
12% 8%
2018 2019
30y+
10-30y
8-10y
5-8y
3-5y
0-3y
$35.2bn
$24.8bn
$33.4bn
$38.0bn
$44.0bn
$63.4bn
$40.9bn
$17.6bn
$53.2bn
$31.6bn
$40.3bn
$5.0bn
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Other
CNY
HKD
SEK
USD
EUR
GBP
2019 Listings SummaryGreater share of international issuers on London Stock Exchange in 2019
16
Source: Bloomberg, Bank of England, December 2019
Data includes active and matured bonds
All duplicate bonds are consolidated
£33.4bnCapital raised on
London Stock Exchange
89% of which has
been raised in 2019
Issuers
59
with Santander
accounting for the
largest issuance in
Q4 raising £1.3bn
Of total capital
raised is on LSE plc
61%
With 64% of
issuances by
volume in London
First SONIA
issuance by
Westpac, £25m
(1Y)
SONIA and SOFR issuances on LSE
First covered SONIA
issuance by RBC,
£1,000m (5Y)
First SOFR Linked
Issuance by IDB,
$600m (3Y)
-
2
4
6
8
10
12
0
1
2
3
4
5
6
Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
2018 2019
Amount raised (£bn) SONIA Amount raised (£bn) SOFR No. of SONIA Bonds No. of SOFR Bonds
SONIA & SOFR Issuances GrowBanks continue to raise funds through SONIA & SOFR issuances
17
Source: London Stock Exchange, December 2019
1 bond raising
THB 270mn
1 bond raising
DOP 260mn
2 bonds raising
NGN 9.9bn
1 bond raising
BDT 800mn
Regional Highlights – New issuances
Africa
First issuances in 4 new currencies
Nigerian Naira Dominican Peso Thai Bhat Bangladeshi Taka
Latin AmericaAsia & Middle East Central & Eastern EU
QNB issues the first masala bond
from the Middle East raising INR
4.5bn
Increase in the number of
Renminbi bonds on LSE. 44
Dimsum bonds raising CNY 15.5bn
were issued on our markets
KIIFB issues India’s first sub-
sovereign masala bond
Komodo bonds keep growing with
EBRD raising IDR 2.6bn Uruguayan Pesos bonds issued by
IFC and CAF raising UYU 3.6bn
We continue to see issuances in
Peruvian Sol with PEN 35mn raised
After a strong 2018, a new
Uzbekistani Som bond was issued
raising UZS 15bn
We saw a large increase in
Ukrainian Hryvnia denominated
bonds with IFC and EBRD raising
an aggregate of UAH 4.7bn
Continued issuances in Romanian
Leu throughout 2019 with RON
111mn worth of bonds issued in
aggregate by IFC and Municipality
Finance PLC
A Kenyan Shilling bond was
issued on London Stock
Exchange after a year with
EBRD raising KES1.03bn
A new Ghanian Cedi bond was
issued by IFC raising GHS
110mn
IFC listed its first Colombian Peso
denominated Green bond raising
COP 35bn
Innovation in Local Currency issuancesLondon remains a leader in Local Currency bonds innovation
IFC and IADB listed 6 Costa Rican
Colón denominated bonds raising
CRC 17.9bn
18
3,500+Recipients of
Pulses and
Quarterly updates
30+
Global
conferences and
roadshows in Asia
Middle East,
Africa, US, Europe
and Latin America
700,000+Impressions on
Twitter and
LinkedIn in 2019
Thought pieces and conferences
Social media reach
Global Visibility for London listed bondsWorld wide reach through social media, conferences and roadshows
19
Fin
ancia
l In
stitu
tions
Corp
ora
tes
EUR 1.25bn, 0.38%, 7Y
EUR 110m, 1.25%, 20Y
April 2019
Main Market
JPY 1,000m, 0.63%, 2Y
February 2019
Main Market
USD 1.75bn, 2.1% 3Y
July 2019
Main Market
EUR 1.2bn, 0.05%, 7Y
June 2019
Main Market
EUR 1.0bn, 0.10, 6Y
May 2019
Main Market
EUR 700m, 1.00% 8Y
EUR 600m, 1.63%, 12Y
May 2019
Main Market
EUR 750mn, 0.38% 5Y
January 2019
Main Market
EUR 650m, 0.00%, 2Y
EUR 500m, 0.25%, 5Y
April 2019
Main market
EUR 600m, 0.13%, 5Y
GBP 500m, 1.75, 8Y
April 2019
Main Market
GBP 1.0bn, 0% 5Y
January 2019
Main Market
USD 550m, 5.13%, 10Y
February 2019
Main Market
GBP 400m, 2.50%, 6Y
May 2019
Main Market
EUR 1.1bn, 1.23%, 12Y
EUR 1.1bn, 0.83%, 9Y
May 2019
Main Market
USD 500m, 2.5%, 5Y
July 2019
Main Market
EUR 500m, 0.38%, 10Y
September 2019
Main Market
EUR 500m, 0.0% 7Y
October 2019
Main Market
EUR 1.0bn, 0.58% 10Y
August 2019
Main Market
GBP 1.0bn, 6.38%
Perpetual
September 2019
ISM
EUR 1.0bn, 0.63%, 10Y
September 2019
Main Market
CNY 845, 3.22%, 5Y
October 2019
Main Market
CNY 140m, 3.57%, 3Y
September 2019
ISM
EUR 650m, 0.50%, 6Y
September 2019
Main Market
GBP 250m, 3.25%, 8Y
July 2019
Main Market
EUR 550m, 1.35%, 6Y
September 2019
Main Market
EUR 550m, 1.25%, 7Y
October 2019
Main Market
USD 500mn, 3.50%, 5Y
December 2019
Main Market
USD 500m, 3.75%, 10Y
September 2019
Main Market
EUR 350m, 0.13% 3Y
November 2019
Main Market
Key 2019 Issuances (1/2)
A diverse range of issuers and products
20
EUR 500m, 0.15%, 15Y
Green Bond
September 2019
Main Market
EUR 500m, 0.9%, 8Y
Sustainable Bond
July 2019
Main Market
CNY 2.5bn, 3.18%, 3Y
Green Bond
November 2019
Main Market
SEK 250m, 0.25%, 6Y
Green Bond
October 2019
Main Market
USD 700m, 1.63%, 5Y
Green Bond
September 2019
Main Market
SO
NIA
&
Gre
en B
onds
Sovere
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
GBP 300m, 5.13%, 5Y
Sustainable Bond
May 2019
Main Market
USD 750mn, 6.20%, 5Y
USD 1.5bn, 8.70%, 30Y
USD 1.7bn, 7.60%, 10Y
February 2019
Main market
EUR 650m, 1.5%, 15Y
EUR 500m, 0.6%, 7Y
September 2019
Main Market
GBP 350m, 2.75%, 22Y
Green Bond
April 2019
Main Market
EUR 1.1bn, 2.75%, 15Y
February 2019
Main Market
USD 1.5bn, 7.55%, 11Y
USD 500mn, 6.35%, 5Y
March 2019
Main Market
USD 1.0bn, 2.50%, 5Y
May 2019
Main Market
USD 1.7bn, 8.0%, 10Y
USD 1.2bn, 9.13%, 30Y
November 2019
Main Market
GBP 25m, 0.91%, 1Y
SONIA Linked
July 2019
Main Market
GBP 600mn, 1.33%, 4Y
SONIA Linked
April 2019
Main Market
GBP 750m, 1.39%, 3Y
SONIA Linked
January 2019
Main Market
GBP 8m, 1.56%, 5Y
SONIA Linked
August 2019
Main Market
GBP 1.0bn, 1.29%, 5Y
SONIA Linked
September 2019
Main Market
GBP 250m, 0.91%, 1Y
SONIA Linked
October 2019
Main Market
GBP 1.0bn, 1.31%, 5Y
SONIA Linked
November 2019
Main Market
Source: London Stock Exchange, Dealogic, October 2019
USD 1.5bn, 2.84%, 5Y
Supranational
April 2019
Main Market
USD 1.2bn, 3.25%, 3Y
Supranational
February 2019
Main market
USD 2.5bn, 2.25%, 5Y
Supranational
May 2019
Main Market
GBP 550m, 0.9%, 3Y
Supranational
January 2019
Main Market
EUR 500m, 0%, 5Y
Supranational
October 2019
Main Market
GBP 225m, 1.37%, 5Y
Supranational
September 2019
Main Market
EUR 500m, 0.0%, 7Y
Supranational
September 2019
Main Market
Key 2019 Issuances (2/2)
A diverse range of issuers and products
21
International Securities
Market: Strongest year
2222
131 bonds
listed on London’s
International
Securities Market
(ISM)
17 countries
Diverse global
reach
£36.6 billion
Money raised on
International
Securities Market
52 issuers
Sovereigns and
corporates
Source: London Stock Exchange Data, December 2019
* Term Investment Grade refers to categories ranging from ‘AAA’ to ‘BBB’. High Yield refers to categories ranging from ‘BB’ to ‘D’
** Region graphs are based on the capital raised
ISM Issuance since Launch
57%30%
5%
4%
2% 1%
APAC Europe South America
North America ME Africa
75%
25%
Investment Grade High Yield
1 2 411
1929
40
52
65
79
109
131
0
20
40
60
80
100
120
140
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018 2019
0
5
10
15
20
25
30
35
40N
um
ber o
f Bonds
Am
ount ra
ised (
$bn)
Amount raised ($bn) No. of bonds
By Credit rating*
By Region**
ISM accelerates its growthCapital raised in 2019 up 127%
23
Sustainable Bond Market
(SBM)
24
31%
30%27%
9%
1%
2%
EUR
GBP
USD
SEK
INR
Other
216Active bonds
admitted to SBM
are listed in London
£36bnTotal money raised from
green issuances
56Unique bond issuers
15Unique currency
denominations
Source: Bloomberg, London Stock Exchange, December 2019
*Based on social, sustainable and issuer-classified bond issuances on London Stock Exchange
Data includes active and matured bonds.
Sustainable Bond Market issuance for the last six years
Sustainable Bond Market breakdown*
4
13
31
40
37
42
0
5
10
15
20
25
30
35
40
45
0
2
4
6
8
10
12
2014 2015 2016 2017 2018 2019
No
. of B
on
ds
Cap
ital R
ais
ed
(£b
n)
Green Issuer Level Classification Social Sustainability No. of Bonds
36%
34%
24%
2%
2%
1%
1%
Government
Utilities
Banks
Consumer
Communications
Industrial
Energy
London’s Sustainable Bond MarketAn international market for sustainable finance instruments
25
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 classified1; 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
1: For more information on Green Economy classification, please refer to our factsheet
Sustainable Bond MarketEnhancing London’s leadership in supporting Sustainable Finance
26
Social
Projects that directly aim
to address or mitigate a
specific social issue
and/or seek to achieve
positive social outcomes
Green
The proceeds will be
exclusively applied to
finance or re-finance
projects with clear
environmental benefits
Sustainability
Sustainability bonds allow
issuers to use the
proceeds for both
environmental and social
projects
Certified Use of Proceeds
Example external review:
o Second Opinion
o Third party Verification
Issuer-level classification
Vanilla Bonds from issuers that:
• Exceed 90% Green Revenues (using FTSE Russell
taxonomy)
• Have 3rd party certification of sustainable business at a
company level
• LSE may identify other categories
Sustainable Bond Market
Sustainable Bond Market StructureExpanding eligibility routes for admission to the Sustainable Bond Market
27
London Stock Exchange utilises strong relationships with key market participants to help further the
development of sustainable capital market initiatives
• In November, London Stock Exchange
was also asked to support a new
2019/2020 ICMA Working Group on
Climate Transition Finance
• This group is coordinated by AXA
Investment managers, HSBC and
JPMorgan and aims to further
development of transition bonds as an
asset class
• Key areas include looking at ways
transition finance can help with industry
diversification in sustainable issuance, as
well as the importance of an issuer’s
climate strategy and financing
NEW: Transition Bonds Working Group
• In October 2019, London Stock Exchange was
chosen to join the ICMA Green Bond (GBP)
and Social Bond Principles (SBP) Advisory
Council
• The role of the Advisory Council is to
complement and provide input to the GBP &
SBP Executive Committee on key market
developments and on international regulatory
initiatives in the space of sustainable finance
• Through engagement with the GBP & SBP
Advisory Council, London Stock Exchange
can provide useful insights gained as a result
of our extensive interactions with our clients
NEW: ICMA GBP & SBP Advisory Council
London Stock Exchange has consistently
engaged with industry groups and initiatives
supporting the development of sustainable
finance, including:
• UN Sustainable Stock Exchange (SSE)
• ICMA Green Bond Principles Member
• Green Infrastructure Investment Coalition
(GIIC)
• City of London’s Green Finance Initiative
(GFI)
• Green Finance Taskforce (GFT)
• Climate Bonds Partnership Program
• European High Level & Technical Level
Expert Groups
Existing Industry Engagement
Sustainable Finance EngagementLondon’s central role in facilitating sustainable long-term growth
Issuer Services Flow
29
Flow is an end-to-end automation tool across the transaction execution process,
streamlining workflows and providing significant time and cost saving potential
• Programme Final
Terms setup in
General Purpose
Legal Markup
Language (GLML).
• GLML pro-forma Final
Terms uploaded onto
platform, and issuance
workflow generated.
• Transaction counterparties
use the platform to
manage execution process
• Term Sheets can be
negotiated between
transaction counterparties
• Either triggered by dealer
based on a reverse
enquiry or by issuer
requests
• Final Terms
automatically
generated
• Documents
finalised by eligible
user, i.e Legal
counsel and
coordinated with
key parties
• Programme and Final
Terms data extracted and
fed to clearing system for
registration
• ISIN assigned and deal
finalised for signing
Programme Final
Terms Setup
Trigger
Drawdown
Negotiate Terms Generate Final
TermsRegister
Deal
What is Flow?Supporting emerging technology in bond issuance
P o w e r e d b y
30
Efficiency
• General-purpose legal Mark-Up language (GLML) within Flow
offers reduced drafting times and increased automation;
allowing counterparties to focus on more valuable interactions
in the transaction life-cycle
End-to-end• Flow can work through the whole transaction life-cycle,
digitising all touchpoints and can interface through STP
connectivity with a user’s internal systems
Intuitive • Flow is designed with current transaction counterparties in
mind, with an intuitive interface and simple, streamlined User
Experience. Dealers & issuers have full control of the process
Auditable• Each step within Flow is recorded. Maintaining deal files for
compliance will become more streamlined
Scalable & Open-Source• Flow’s Infrastructure, data and application layers designed to
manage effectively numerous transactions in parallel and
irrespective of locations of the users
Secure• Flow is designed using a zero trust model for all
communications; and all services running on LSEG
infrastructure
Why Flow?Delivering enhanced efficiency and automation
P o w e r e d b y
31P o w e r e d b y
• Flow aims to digitise specific workflows within the capital markets
origination and execution processes.
1. Trade Origination
2. Document negotiation and coordination
• Programmes and corresponding term sheets, final
terms and swap confirmation
3. Data dissemination
• Send data to market infrastructure providers
• Issuer Services Flow aims to improve upon non-standard, bilateral
processes that use multiple communication tools currently
• General-Legal Mark Up Language (GLML) is used to automate
term sheet and final terms negotiation processes through on-platform
interaction between issuers, dealers and legal advisors GLML was
created by Nivaura, but has now been made open source.
Significant legal resources committed to growing the library of
programmes available to dealers
21
3
Issuer
Buy Side
Sales Desk
Issuer’s
Counsel
Origination
IPA
CSD /
Clearing
Custodian
Dealer’s
Counsel
Exchanges
How does Flow work?End-to-end platform for DCM origination and execution
32
• The GLML consortium will be a group of law firms, industry bodies,
financial institutions and infrastructure providers who are interested in
driving forward automation in capital markets
• Over time it may broaden out to cover other areas of law. The
consortium will meet regularly and, once established, is expected to be
run by a not for profit company limited by the guarantee of its members
• The consortium will be responsible for maintaining and developing
GLML
• GLML is still at an early stage but since it started being used by law
firms its functionality has grown enormously
• As it is adopted across the market this trend will continue and it will be
the role of the consortium to create and maintain standards as well as
driving increased functionality and use of it across the market
Driving market-wide adoption of GLML and promoting automation in capital markets
P o w e r e d b y
The GLML ConsortiumUsing General-Legal Mark Up Language to save time and costs
33
Increase speed to market & timeliness of activity via
automation.
Streamline internal costs
Expanding the range of economically viable transactions
Integration of deal data into primary risk and treasury
management systems.
Optimise risk management and reduce operational risk
Better visibility on transaction progress, inputs from
different parties, and audit trails.
Issuer Services Flow Benefits
P o w e r e d b y
Benefits for Issuers Revolutionising the capital markets execution process
34
Where Can You Find Us?
(2020 Events)
3535
Date : Friday, 6 March 2020,
8.30am - 2.00pm
Venue: London Stock Exchange
Group, 10 Paternoster Square,
London EC4M 7LS
Key Topics
‒ Recent Trends in Sterling and Global Debt Capital Markets
‒ Growth and evolution of sustainable finance
‒ Emerging Markets capital raising through London
‒ Challenges and opportunities in the transition to alternative risk free
rates
‒ Innovation in primary markets through new emerging technologies
Event details Time
Registration 8.30am
Conference 9.00am
Networking lunch 1.00pm
Conference ends 2.00pm
LSEG Debt Capital Markets Forum 2020LSEG’s 2nd annual DCM conference
3636
Conference Date Location
Euromoney CEE Forum 202014-15
JanuaryVienna, Austria
UK-Africa Investment Summit20-21
JanuaryLondon, UK
CSFI Green-Linked Bonds Lunch11
FebruaryLondon, UK
LSEG UK DCM Conference06
MarchLondon, UK
GFC Bonds, Loans & Sukuk Africa 202010-11
MarchCape Town, South Africa
ICMA/DLA Piper India Securities Summit13
MarchLondon, UK
GFC Bonds, Loans & Sukuk ME 202024-25
MarchDubai, UAE
Euromoney Global Borrowers Bond
Investors Forum
16-17
June London, UK
IMN Global ABS 2020 16-18
JuneBarcelona, Spain
ICMA AGM & Conference 202024-26
JuneVienna, Austria
Where you can find usEvents Calendar Q1 and Q2 2020
37
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
39
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