Sustainability-Linked Term Loan Bs: Aligning leveraged loans with ESG integration strategies

Investors' Voice

Sustainability-Linked Term Loan B instruments represent a growing market segment within the expanding asset classes of sustainability-linked debt.

 

Mirroring the multifold growth of Sustainability-Linked Loan volumes in 2021, issuance of European Marketed Sustainability-Linked Institutional Term Loan Bs rose to USD 32 bn in 2021 representing 22% of the European Term Loan B market in volume according to Dealogic.

 

Following the Natixis investor survey published in June 2021 detailing the progressive integration of ESG criteria in the High Yield bond segment  (“ESG integration in Leverage Finance: where do we stand?”), we were interested in exploring how institutional investors were applying their ESG integration strategies on the leveraged loan side, and how the growing use of the SL TLB product fits into this dynamic.

 

In this context, we are pleased to share the results of our latest survey conducted in late 2021 describing investors’ views of Sustainability Linked Term Loan B instruments.