Overall an excellent piece, it is notable when it comes to securitisation for its support for a definition of green that encompasses issuance where the proceeds are used by the originator to finance sustainable projects. This can be found in article 3.1.5 of their opinion.
The European
Central Bank has just published its opinion
on the draft EU Green Bond Standard legislation.
As our readers
will recall, a debate arose as to whether the legal EU definition of
sustainable securitisation should be limited solely to securitisations of green
assets (eg mortgages of green housing or auto loans for electric vehicles) or
could also cover – as is the case for all other capital market instruments –
bonds whose proceeds are used to finance the transition to a sustainable
economy. PCS has argued forcefully that the latter is both logically
compelling and far better helps achieve Europe’s sustainability goals.
In the context
of the draft EU Green Bond Standard legislation, the intervention of the ECB is
welcome not only for its support for the broader definition but also at a
technical drafting level by suggesting a clarification of the text. As
currently drafted, the law may not allow a real “use of proceeds” approach
because of the ambiguity of the definition of proceeds for
securitisations. The ECB has rightly suggested the ambiguity be lifted to
clarify that proceeds of a securitisation in the hands of the originator may be
used for green purposes and not, if one followed a technical narrow reading,
only the proceeds in the hands of the special purpose vehicle.
The post Green securitisation – ECB adds its voice in support of
the “green proceeds” approach appeared first on Prime Collateralised Securities.
© PCS
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