On April 29, 2024, Eurex launched an additional Green Bond Basket in the GC Pooling segment. The addition aims to increase liquidity and efficiency in the European repo market for green bonds, thereby strengthening the green bond segment.
The new basket complements three other Green Bond baskets that were already launched in the Special and GC Repo segments in 2020 and 2021.
The launch of the new GC Pooling green bond basket allows clients to leverage cash in EUR, USD, GBP or CHF against a choice of 80 green bonds issued by sovereign and supranational entities in seven countries within the European Economic Area. In turn, the collateral taken from the basket can be reused for Eurex clearing margin with Clearstream TriParty, leveraging the established GC Pooling market design to mitigate the risk of trade failure.
The bonds included in the basket are issued in the fields of renewable energy, sustainable waste management, biodiversity conservation and/or sustainable land use and are classified as a Green Bond according to data provided by WM Datenservice. They are a subset of the established Eurex Repo GC Pooling ECB basket with a minimum rating of A-/A3.
Carsten Hiller, Head of Repo Sales Europe, at Eurex, commented:
“The new offering supports Eurex’s ESG-related initiatives and demonstrates its strong efforts to support the development of a holistic and well-functioning green bond ecosystem. We believe this basket will facilitate greater participation by market participants, enabling them to effectively manage collateral while promoting green initiatives.”