Page 279 - 2019 6th AFIS & ASMMA

If you look at this particular slide, you can see how the sustainable
markets in Europe, the sustainable bond markets, are developing. Only
this year, for the first seven months of the year, we have seen a new
supply coming through the market, which is in excess of the supply last
year. But at the same time, if you look at the share of the covered bond
market, you can see it remains only at 5%, which is remarkably small
given the size of the covered bond market in Europe. Now I think there Session I
can be a couple of explanations.

Another important takeaway for today is this; if you look at the
overall sustainable bond market in euros, you can see green is heavily
dominating this bond market, but not so much in the covered bond
market. In covered bonds, the share of green bond issuance is only
60 percent. There are a couple of explanations for this. I think the
most important one is in the telling and finding the eligible loans. As
you know, covered bonds are primarily used to refinance residential
mortgage loans, which also means that you need to find a number of
I think the most obvious explanation is probably the structural eligible mortgage loans to create a green pool. A substantial pool of green
consideration. Namely to print sustainable covered bonds, you not only assets is more easily created by selecting larger loans, like for instance,
need to select a portfolio of eligible sustainable loans, but at the same renewable energy loans or commercial real estate assets.
time, ideally, you also need to make sure these loans meet the criteria
for the covered bond collateral pool. That leaves you with a smaller
potential pool of eligible assets.

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