European Green Securitization Volumes Unlikely to Fulfil Investor Demand in the Short Term, but Foundations Well Under Way

The European market has a scarcity of eligible assets to support significant Green structured finance issuance and the definitions of Green securitizations and green assets are yet to be officially determined. Credit research shows instead of significant flows, isolated deals will be the major issuances in the short term. Despite this, investor demand for green covered bonds is wider and higher than in traditional covered bonds and cited as a “sector to watch” in 2021.