Fixed Income

Sustainability-Linked Bond

Definition

What is Sustainability-Linked Bond?

A bond whose financial terms change if the issuer meets or misses specified sustainability targets.

Example in practice

The coupon rises if the company fails to reduce emissions by the target date.

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A debt security through which an investor lends money to an issuer in return for promised payments.

The government, company, or organisation that creates and sells a security.

The principal amount stated on a bond and usually repaid at maturity.

A short-term government debt instrument usually issued at a discount and repaid at face value.

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