Securitisation and Regulation News

Sustainable infrastructure securitisations via CLO

In the next fifteen years, the world will face an enormous challenge. The transformation of the economy and society into sustainable climate neutrality requires new ideas, new technologies and, above all, a lot of money. 100 trillion USD investments are needed, most of them in infrastructure, transport systems, energy generation, storage and distribution, construction measures.

So far, over 80% of all infrastructure financing comes from banks. Correspondingly, these are a burden on banks' balance sheets. And the banks have the know-how and experience to evaluate and process infrastructure investments. But banks do not have the capacity to handle this enormous future task on their own. Therefore, the task is to bring large volumes of these complex and technically demanding financings to the capital market and to transfer them into tradable bonds rated by rating agencies. In this way, the bank's balance sheets create space for new, further infrastructure investments. To put it in a nutshell: it will not work without securitisations. On the way to a sustainable market for infrastructure securitisations.

This recognition is now also gaining ground at the level of the G20, the association of 19 states and the EU that has existed since 1999 to coordinate global issues in the fields of economics and finance and even climate policy. In a white paper commissioned by the G20 Sustainable Finance Study Group (SFSG) and prepared with the participation of experts from the market, one comes to the conclusion that only the creation of an international infrastructure CLO market can master the financing task without the infrastructure financing know-how concentrated in the banks being left out.

Go to the White Paper of G20 Sustainable Finance Study Group on The Role of Collateralised Loan Obligation (CLO)