Glossary
Presenting an investment or business as more environmentally sound than it is, now a live regulatory and disclosure risk in sustainable finance.
Recent Trends
from Capital Markets
ESG bonds — green bonds, social bonds, and sustainability-linked bonds — have surged as issuers seek to align financing with environmental commitments, though concerns about greenwashing have prompted tighter disclosure standards. The UK's post-Brexit overhaul of its listing regime (the new UKLR rules effective 2024) simplified the premium/standard distinction into a single listing category, aiming to make London more competitive for IPOs. Direct listings, where companies list without raising new capital or using underwriters, offer an alternative to the traditional IPO but have seen limited uptake outside the US. Meanwhile, the rise of private credit markets has given companies another route to raise debt outside public bond markets.
IPO (Initial Public Offering)
The first sale of a company's shares to the public, marking its transition from a private to a publicly listed entity.
Prospectus
A legal document disclosing all material information about the issuer and the offering, required for public offers of securities.
Underwriting
The commitment by an investment bank to purchase all or part of a securities offering, guaranteeing the issuer raises its target funds.
Bookbuilding
The process of gauging investor demand at different price levels to determine the final offer price of an IPO or bond.
Coupon
The periodic interest payment made to a bondholder, expressed as an annual percentage of the bond's face value.
Covenant
A binding promise in a bond's terms restricting the issuer's conduct (e.g., caps on additional debt) to protect investors.
Free Float
The proportion of a listed company's shares that are available for public trading, excluding shares held by insiders or strategic investors.
Yield
The annual return an investor earns on a bond, accounting for its coupon payments and the price paid for it.