Issuer blackouts impact FI GSS primary market activity in Feb

Our specialists take a moment to reflect on the key trends and themes shaping the market, considering the impact of issuer blackouts on the Financial Institution (FI) GSS primary market and more.

Primary Market Activity

In a month of limited supply, February saw almost all issuers opt for EUR currency. ABN AMRO (a notable exception) opted for a £500m 5yr green in Senior Non-Preferred format. It’s worth noting that ABN AMRO also issued a benchmark CHF green bond with Danske Bank, whilst SpareBank 1 Nord-Norge issued sub-benchmark green bonds in the currency.

Senior format continued to account for the majority of issuance (six transactions) including a €500m senior preferred green by Hypo Vorarlberg, their inaugural GSS benchmark bond. NN Bank and UniCredit both came with €750m covered bonds, and there was no GSS capital issued this month.

The green format remained the preferred label for financial institutions; accounting for all eight GSS transactions this month (no issuance in social or sustainability format).

European Banks & Insurance GSS/S Issuance (1)

Green, Social, Sustainability and Sustainability-linked (GSS/S) issuance slowed in February with a modest 7% year-on-year (YoY) growth. However, the 2023 YTD total remains strong; up 68% YoY, already at 31% of 2022 total volumes, due to exceptionally strong volumes in January.

Green GSS/S issuance (c. €20bn) represents 82% of GSS/S issuance in 2023 YTD, as it continues its longstanding dominance and remains in line with previous years (c.75% for both 2020 / 2021 and 85% for 2022). Social issuance is at 14%, marginally up on previous years, with sustainability at 4%.

GSS/S issuance has been evenly split between senior preferred (35%) and senior non-preferred (38%) followed by covered (24%), along with a small tail of GSS capital issuance (2%).

European Bank and Insurance GSS/S Supply 2022-2023 YTD

Source: Dealogic (28/02/23)

European Bank and Insurance GSS/S Issuance Breakdown 2018-2023 YTD

Source: Dealogic (28/02/23)

Global EUR/GBP FIG GSS Issuance (2)

  • EUR Senior: YTD GSS issuance of €18.0bn (+64% vs 2022 YTD) with total senior supply at €87.8bn (+87%); resulting in a decrease of GSS as a % of total issuance to 21% (2022 YTD: 23%).
  • GBP Senior: YTD GSS issuance is £500m (2022 YTD: nil) with total senior supply at £13.2bn (+208%); resulting in GSS as a % of total issuance of 4% (2022 YTD: nil).
  • EUR Covered: YTD GSS issuance of €6.1bn (+303% vs 2022 YTD) with total covered supply at €69.5bn (+57%); resulting in an increase of GSS as a % of total issuance to 9% (2022 YTD: 3%).
  • GBP Covered: YTD issuance is nil (2022 YTD: £0.5bn) with total covered supply at £4.0bn (+3%); resulting in GSS as a % of total issuance of nil (2022 YTD:13%).


Banking & Financial Institutions Sector Developments

Investor Developments

Government and Regulatory Developments

ESG and Credit Rating Agencies Developments

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As always, if you would like to discuss any of the above further, please reach out to our authors:

*For any unfamiliar terms used within this article please refer to our Insights glossary.

Additional information

(1) Includes European Bank & Insurance GSS/S Issuance

(2) Source: NatWest Markets Syndicate (01/03/23). It includes Global Financial Institutions EUR & GBP Issuance.

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