As with many areas of finance and investment, Environmental, Social, and Governance (ESG) consideration have increasingly made their presence known in the world of loan issuance. According to BloombergNEF, more than US$1.6 trillion in sustainable debt instruments were issued in 2021. Nearly one-third of this activity occurred in loans rather than bonds.
The private debt market has been a significant growth story for some time. As we now look at a backdrop of rising short-term interest rates, iCapital sees investors looking to private credit as “a significant buffer over publicly traded high-yield or leveraged loans.”Yet, such front-office growth only hints at the implications behind the scenes. As a provider of loan market solutions, we see this trend through an operational lens.
235,900: This figure represents the number of contracts in the UK that have yet to transition from reliance on London Interbank Offered Rates (LIBOR) to the new Sterling Overnight Index Average, or SONIA, according to January 2022 data from the Financial Conduct Authority (FCA). These contracts include interest-rate derivatives, bonds, securitisations, loans, mortgages and other products. They represent £472 billion in value, per the FCA.