Latin American Sustainable Bond Market (A Growing Presence)

Wed 14 Jul, 2021 - 10:15 AM ET

Sustainable bonds became a growing presence across Latin American cross-border issuers in recent years, and Fitch Ratings expects continued growth as market participants increase their awareness of and interest in Environmental, Social and Governance (ESG) factors.This report explains the evolution of sustainable bonds issued by cross-border LatAm corporates, and analyzes the distribution across ratings, countries and sectors. It also includes the benefits, challenges and concerns of the growing Green, Social, Sustainability and Sustainability-linked (GSSS) market. The report summarizes 22 sustainability and sustainability-linked notes, listing their specific terms and conditions. Sustainability-linked notes have been increasingly issued in Latin America since 2020 and the momentum of the GSSS market continues. Sustainable bonds represented 5% of total nonfinancial corporate cross-border bond issuances during 2020, with USD4.1 billion of issuance activity. These bonds represented 30% of LatAm issuance YTD through July 2021, totalling USD12.1 billion in total issuances.Brazil is the largest sustainable bond-issuing country within Latin America, representing 52% of GSSS issuances in the region. Mexico is the second largest. Other countries, such as Chile, Argentina, Colombia, Guatemala, Panama and Peru, still have low sustainable bond volumes.

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