After a strong 2021 Environmental Finance Bond Awards, BNP Paribas built on its success with further wins for its work as a loan arranger and social bond lead manager – whilst also picking up the sustainability-linked bond (SLB) lead manager award.
The French bank secured the SLB lead manager award for the first time after building an impressive presence in this fast-growing market.
BNP Paribas sustainable finance markets head Agnes Gourc told Environmental Finance the success of the SLB in recent years has demonstrated the increasingly inclusive nature of the sustainable fixed income market.
"The debut SLBs from [oil and gas companies] Eni and Repsol showed how sustainable finance has transformed over the years and can today be inclusive of transitioning players from high-emitting sectors," she said.
BNP Paribas worked on these inaugural SLBs from the two oil and gas firms, with Italian firm Eni raising €1 billion ($1.1 billion) and Spanish firm Repsol €1.25 billion in June 2021.
Gourc said the multi-tranche SLB from Teva in November demonstrated the "positive force of sustainable finance at play," with the pharmaceutical firm launching new sustainability key performance indicators alongside its SLB.
"The big question for 2022 in sustainability-linked bonds will definitely be around sovereigns, supranationals and agencies (SSAs) and bank issuers," she said. "At the moment, we have only seen very limited examples of banks and SSAs accessing this market."
In March 2022, BNP Paribas was also involved in the landmark SLB from Chile – the first to be issued by a sovereign.
"More than any given deal, we are most proud of the breadth of the transactions we have delivered for our clients," she added.
For sustainability-linked loans (SLLs) alone, Gourc highlighted the work of BNP Paribas on loans to Finnish electricity grid operator Fingrid, cement maker Holcim, retailers Kingfisher and Marks & Spencer and technology firm HP.
"Overall, this is this variety of experience that means we can provide the most informed views to our clients," she said.
Gourc said SLLs have now become "integral" parts of the financing toolkit for corporates, a trend she expects to accelerate across sectors in the future. The success of BNP Paribas across the sustainable loan market – including green and social loans – helped it pick up the Loan structurer/arranger/coordinator of the year award for the third year running.
BNP Paribas also continued its award-winning run as a social bond lead manager, securing the award for its work with financial institutions. During 2021, BNP Paribas worked on the $750 million OneMain Financial social bond in June – the first from a high-yield issuer – and the £472 million ($623 million) maiden social bond from Kensington Mortgage in February which was the first social residential mortgage-backed security (RMBS) in the UK.
In the future, Gourc hopes to see a more diverse range of issuers coming to the social bond market – a trend she is beginning to see in the securitisation space already. More broadly, Gourc hopes to see more asset-backed securities (ABS) – like RMBS – being issued in sustainable bond format over time.
"We do feel the next big area of development for sustainable finance is in the asset-backed space," she said. "We have seen some ESG transactions already – and structured a number of them – but see more to be done."