What is Thematic Bonds?
Thematic bonds are specialized fixed-income securities aimed at funding specific Sustainable Development Goals (SDGs), such as climate action, health, and education. They offer portfolio risk balancing for investors and provide issuers with access to new funding sources and enhanced ESG credentials. These bonds are categorized into use of proceeds (UoP) bonds for specific projects and key performance indicator (KPI) bonds that link returns to achieving broader sustainability objectives, potentially influencing coupon rates based on performance.
