Thursday 25 June 2020

The Banker Team of the Month profiled BNP Paribas sustainable finance and DCM teams for their efforts in developing Covid-19 response bonds to fight the crisis.


The Banker magazine profiled the BNP Paribas' teams behind the recent Covid-19 response bonds, discussing how these new types of social bonds are helping finance vital crisis responses. The Banker spoke to the team about the development of the market, issuer rationale, and the overall ESG landscape in the wake of Covid-19. BNP Paribas has supported clients to issue over US eq. $59 billion of Covid-19 response bonds in 2020, in a market that has grown to over $100bn, according to Bloomberg and BNP Paribas data.
" BNP Paribas has supported clients to issue over US eq. $59 billion of COVID-19 response bonds in 2020."

The bank's expertise in sustainable finance and debt capital markets was a driving force behind the development of these crisis response funding mechanisms. "We have dedicated people for ESG in structuring and in syndicate," said Delphine Queniart, Global Head of Sustainable Finance and Solutions, Global Markets at BNP Paribas.

With Covid-19 response bonds, investor capital is channelled to pre-defined use of proceeds that tackle social causes. "They provide clarity for investors by identifying a project or asset, usually to support employment, by small and medium-sized enterprise (SME) lending, or healthcare systems," explained Agnes Gourc, Co-Head Sustainable Finance Markets, BNP Paribas to the Banker magazine.

Most issuers of Covid-19 response bonds were government agencies that raised additional funds in support of crisis responses, said Jamie Stirling, Head of SSA DCM at BNP Paribas.

The bonds themselves were heavily oversubscribed. Benjamin de Forton, DCM public sector origination banker at BNP Paribas who worked on many of the Covid-19 deals, highlighted an example of how the European Investment Bank (EIB)'s €1 billion Sustainability Awareness Bond – which supports European companies, health interventions and the economy – attracted €7.3bn of demand and was over 7 times oversubscribed.

Most of the recent Covid-19 response bonds follow the International Capital Markets Association's (ICMA) Social Bond Principles, which outline issuers' obligations. These includes project evaluation and selection, management of proceeds and reporting.
BNP Paribas supporting the development of international social bond standards

  • BNP Paribas has played an active role in developing the social bond market, and in June 2020 was re-elected to the ICMA Green Bond Principles & Social Bond Principles Executive Committee.
  • The bank has been a member of the Executive Committee since 2016 and have been actively engaged, throughout the years and is in all 6 of the Working Groups.

Agnes Gourc
Co-Head Sustainable Finance Markets at BNP Paribas
Benjamin de Forton
DCM public sector origination banker at BNP Paribas
Delphine Queniart
Global Head of Sustainable Finance and Solutions, Global Markets at BNP Paribas.
Jamie Stirling
Head of SSA DCM at BNP Paribas
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