Conceptual Actual Exam Questions With
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1. What do you call when the return of the ESG bonds is lower than the non-
ESG bonds - ANSWER greenium
2. Is EU Green bond standard involuntary or voluntary? - ANSWER it
serves as a voluntary high-quality standard to promote the growth and
environmental ambitions in the green bond market
3. When does the EU GBS apply? - ANSWER 21 Dec 2024 (Regulation
includes a transitional period of 1 year)
4. What are the four things listed in the Green Bond Standard? - ANSWER
1. Voluntary but restrictive
2. New requirements
3. External reviewers
4. Increased transparency
5. What are the details of the 'voluntary but restrictive' under the EUGBs -
ANSWER all proceeds of EUGBs need to be directed towards taxonomy-
aligned activities, for sectors already covered.
,'flexibility pocket' of 15% for sectors not yet covered by the taxonomy and for
certain very specific activties.
6. What are the details of the 'new requirement' under the EUGBs - ANSWER
All the EUGBs need a vertified transition plan to avoid greenwashing,
processes to identify adverse impacts, no issuance from countries that are
on EUs grey or blacklist of tax havens
7. What are the details of the 'external reviewers' under the EUGBs - ANSWER
introduction of a registration system and supervisroy framework, fewer
conflicts of interest, possible ban to issue EU GBs as sanction mechainism,
investors have legal recourse if issuer's failure to comply leads to
depreciation of the bond
8. What are the details of the 'increased transparency' under the EUGBs -
ANSWER enchanced requirements for gas and nuclear, prominent
display of information on the first page of the EUGBs factsheet
9. What is the difference between ESG bonds and SLBs - ANSWER ESG
bonds' emphasis is on the traceability of the use of funds
SLBs emphasis is on the attainment of KPIs
10.What is the definition of SLBs - ANSWER - raise general purpose finance
- ivovlve coupon step-ups
- occasionally (optional), step-downs linked to the achievement of pre-
defined, time bound SPTs
, 11.What is an innovative example of SLB? - ANSWER Chile's issuance of its
first sovereign SLB
12.What are the details of Chile's sovereign SLB? amount & maturity year &
amount of coupons step-ups - ANSWER USD2B, 2042 maturity deal,
coupon step-ups of up to 25bps total
13.What are the details of the coupon step-ups of Chile's issuance of sovereign
SLB? - ANSWER - failure to cut GHG emissions by 15.4% by 2023 would
incur a coupon step-up of 6.25bps
- failure to reach peak emissions between 2020 and 2030 would incur
a coupon step-up of 6.25 bps
- failure to increase renewables installed capacity by 60% by 2032
would incur a coupon step-up of 12.5 bps
14.SIBs marks has continued to be on the rise during recent yers. How many
bonds are launched in how many countries? and how many captial was
raised? - ANSWER 239 bonds across 40 countries, and up till July 2024,
US$517.13 million of capital was raised
15.Where are SIB currently concentrated? developed countries or developing
countries? How many are issued in low and middle income countries? -
ANSWER they are concentrated in developed countries, with only 33
impact bonds issued in low- and middle-income countries