SUSTAINABLE FINANCE IN 2022: EMISSIONS RECORD

At global, regional and local level, sustainable finance is gaining more and more strength. In particular, the issuance of Green, Social and Sustainable Bonds (SVS) had a record reach in the local market this past year. The total amount of debt labeled on the Panel since its launch in 2019 to date already exceeds USD 1.1 billion.

The evolution of these issues is a reflection of a context of change, of greater social awareness of the impact of our actions on our environment. The world is in constant transformation, with greener means of transport, as well as the development of green infrastructures or the transition towards greater use of renewable energies. To enhance this, markets can play a key role in providing opportunities. At BYMA, we have been creating conditions that multiple participants are already capitalizing on. 2022 is a clear example.

Since the SVS Bond Panel was launched in September 2019, to date it comprises 38 marketable securities. 17 of them were issued during this past year. In turn, a new Sustainability Linked (VS) Bond Panel was introduced in February, which already has 3 marketable securities. Thus, 2022 ends with 20 new issues with positive impact, a record for the Argentine financial ecosystem. In 2019 a single negotiable security was issued; in 2022 there were 4; and in 2021 the total was 16.

KEYS TO THIS GROWTH

New players have entered this type of financing

There are currently multiple cases of SMEs and civil associations that are being financed in the Capital Markets. In 2021 the first SVS issues of civil associations were registered: Techo and Sumatoria, a starting point for what happened in 2022. During this year, Sumatoria made 3 additional issues, which were sustainable bonds.

Any type of company, government or organization can issue an SVS Bond or a VS Bond, as long as it complies with the legal and regulatory conditions in force for the marketable securities it applies to list.

‍Multiple issues made by the same issuer

‍Since the launch of the SVS Bond Panel, 21 issuers issued 38 marketable securities. In a large number of cases, the same issuer made several issues, demonstrating that this type of financing allows the achievement of its objectives. Some cases are Genneia (6 issues), SION (4 issues), Luz de Tres Picos (4 issues), Sumatoria (4 issues), Plaza Logística (2 issues), CP Manque and CP Los Olivos (2 issues). The same occurred in the VS Bond Panel. Of the 3 bonds that comprise it, 2 of them were issued by Red Surcos.

Large variety of instruments

The diversity of companies in terms of size and sectors is also reflected in the variety of instruments of the issues. Among all SVS issues, 48.7% correspond to corporate bonds; 25.6% to CNV Guaranteed SME corporate bonds; 10.3% to SME corporate bonds; 7.7% to financial trusts; 5.2% to debt securities; and 2.6% to closed-end mutual funds.

Different types of issues

‍In 2021 the first issue of a sustainable bond was registered, and in 2022 3 new issues of this type were added. The distribution of issuances by type of bond during that year is 64% green bonds, 18% sustainable bonds and 18% social bonds; while in 2021 while green bonds had led issuances, sustainable bonds had accounted for only 12%.

New Developments

‍In February 2022, BYMA incorporated in the Argentine market the Sustainability-Linked Bonds Panel which already has 2 issues of Red Surcos and one of San Miguel. The differential feature that these bonds have is that instead of being destined to a specific social or environmental project or both, this bond is used to achieve future improvements in its sustainability performance within a previously delimited term.

CREATING THE CONDITIONS

The boom of green, social and sustainable bonds was the fruit of years of hard work at BYMA. To bring these impactful issues to fruition, a group of experts in finance and, especially in sustainable finance, spent many hours not only to develop guidelines and regulations, which have Regulator approval, but also to evangelize and train companies to be aware of these financing instruments in the Capital Markets.

With respect to the SVS Bond Panel, worked in conjunction with the Buenos Aires Stock Exchange, to encourage these instruments and sustainable finance in the Capital Market, it was decided to subsidize the cost of the primary placement as well as the listing and publication fees of the instruments that are labeled in such Panels. In addition, we are actively working to disseminate and promote these practices among local issuers.

BYMA also works in synergy with other market players. In this sense, BYMA and MAE signed a collaboration agreement for the primary placement of these Bonds. The execution of this agreement shows the willingness of both markets to establish mechanisms to facilitate the development of instruments that contribute to provide environmental and/or social solutions, through the necessary operational channels for the primary placement of such issues.

BYMA'S ECOSYSTEM FOR SUSTAINABLE FINANCES

BYMA focuses its efforts to comply with the commitment generated with sustainability through different actions that set a course within the financial market path. Complementarily, the BYMA Stock Exchange introduced in recent years different products such as the Corporate Governance Panel and the Sustainability Index.

‍All BYMA's developments to promote sustainability and sustainable finance in the local market are aligned with widely recognized international standards and developments of the world's Stock Exchanges and all Panels are approved by the National Securities Commission.

BYMA works so that companies transcend the supply of products and services, and thus contribute to the generation of a positive impact. Together with shareholders, clients, collaborators, suppliers, regulators and the community, we build a responsible ecosystem, committed to the development of our country.

THE LOOK AHEAD

BYMA continues working and developing products, and promoting the necessary training to further enhance sustainable finance in the local market, and thus generate greater value and satisfy investor demand.

‍The context of the climate crisis, social pressure and business motivations are making companies pay more and more attention to their environmental and social impact. From BYMA, we seek to accompany this scenario. 

More information on Green and Sustainable Social Bonds (SVS).

More information on Sustainability-linked bonds (SVS).