Fixed Income Analysis /

Sector Flash - Automotive sector ESG debt: Allocation, impact and outlook

    Sven Kreitmair
    Sven Kreitmair

    Head of Credit Research

    30 August 2021
    Published byUniCredit
    • In this note, we take a look at the first allocation and impact reports in this relatively new bond segment for the automotive sector. In addition, we provide our thoughts on future bond issuance, ESG bond documentation and current valuation. We also add overviews of individual automotive ESG bond and Schuldschein loan issuance, the so far published Science Based Targets initiative’s (SBTi) warming targets and ESG profile tables of automotive bond issuers.
    • In the BB space, we do not see a greenium, except for some estimated 20bp associated with the EOFP 29. For VW and Daimler, we estimate that a greenium of some 10bp is associated with the green DAIGR 30, VW 28 and VW 32 bonds, compared to the conventional-bond curve. On Daimler’s green-bond curve, the 3/33 look attractive vs. the 9/30.