Successful bondholder engagement with issuers is largely dependent on whether the deal is public or private, and whether the investor engages pre- or post-issuance.
Timing the engagement is a strategic decision, because the bondholder’s influence with issuers varies throughout the issuance lifecycle. If the debt issuance is privately placed, the investor is more likely to have direct engagement with the prospective issuer both pre- and post-issuance. The table below shows the bond issuance ‘lifecycle’, alongside scope and limitations to bondholder engagement with issuers on a range of potential issues, including ESG.
|Bondholder influence over issuers||
|Pre and post-issuance|
|Contractual bondholder rights and issuer obligations||Transaction documentation provides the framework for the issuer’s obligations to its bondholders, which includes any obligations in respect of ESG matters:
|Regulatory issuer obligations||
Relevant UK/EU regulation
Relevant US regulation
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ESG Engagement for Fixed Income Investors
ESG engagement for fixed income investors: Managing risks, enhancing returns
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