In this analysis, we unpack the spread dynamics between LGENSO’s green and traditional bonds — what’s known as the “greenium” — and benchmark these against Korean and US automakers. Greenium can change over time, and there is no obvious pattern. While periods of underperformance in green bonds may represent a shift in demand and supply, they also offer investors an opportunity to align their portfolios with sustainability goals without sacrificing returns.
This pricing discrepancy sets the stage for a deeper look at shifting investor sentiment and the mechanics of green bond valuation. Periods of underperformance in green bonds offer investors an opportunity to align their portfolios with sustainability goals without sacrificing returns.
