Laconic is able to leverage its deep capital markets and project finance expertise to structure tailored financing products. Each product is specifically attuned to the particular needs and requirements of the individual partnerships we undertake.
Our use of bespoke capital structures frees Laconic from the need to subordinate the environmental and social benefits of a specific policy outcome that is typically set to the constraints of archaic financing products and methodologies. Our financial models facilitate transformative development concepts and maximize total economic benefit for our outcome partners. This process is fully baked into the Laconic Outcome as a Service (OaaS) delivery model – it is seamless from our clients’ point of view.
Laconic’s unique approach to financial structuring firmly places the long-term social, political, and environmental benefits of any development opportunity at the forefront of our evaluative value hierarchy. Our goal is to never be forced to abandon a quality opportunity to better mankind, due solely to the lack of vision embodied by existing financial products and structures.
If it works – we will use it.
If it is broken – we will fix it.
If it doesn’t exist – we will create it.
While the particulars differ from structure to structure, typical elements of a Laconic capital stack include:
Green Bond Issuance
Blue Bond Issuance
Social Bond Issuance
Senior Secured Debt
Syndicated Debt Offerings
Cash Flow Securitizations
Venture Rights Offerings
Credit Default Swaps and other Derivatives
Credit Enhancement Instruments
Venture Royalty Streams
Innovative Structures as Required
Partnering with Laconic allows our clients to focus on the aggregate benefit suite delivered by a particular policy outcome, rather than be captured by the (relatively) shorter term time horizons that are imposed by traditional project finance methodologies.
What is a green bond?
A green bond, like any other bond, is a fixed-income financial instrument for raising capital through the debt capital markets.
A green bond, like any other bond, is a fixed-income financial instrument for raising capital through the debt capital markets. In its simplest form, the bond issuer raises a fixed amount of capital from investors over a set period of time, repaying the capital when the bond matures and paying an agreed amount of interest (coupons) along the way. The key difference between a “green” bond and a regular bond is that the issuer publicly states it is raising capital to fund green projects, assets or business activities with an environmental benefit, such as renewable energy, low carbon transport or forestry projects. Bonds can also be used to fund projects with a social or community benefit such as improving healthcare or social services, and these are typically known as “social” or “social impact” bonds.
Green bonds are meant to reduce climate impact by using some or all of the money raised on projects that relate to clean water and renewable/efficient energy. Investors now favor green bonds over traditional bonds when the price and terms are the same, because green bonds offer the additional environmental component that many investors seek. Issuers are also becoming increasingly aware that there are benefits of green bond issuances, especially high investor demand and diversification that can lead to greater transaction size, longer maturities, and in some cases improved pricing, which may serve to mitigate the costs associated with the issuance of a green bond.
Additionally, green bonds are typically oversubscribed compared to traditional bonds, which attracts a premium also referred to as a “Greenium.” This means that issuers are able to obtain a cheaper cost of funding by issuing debt with a specified “use of proceeds” that have positive environmental and/or social impacts as compared to traditional bonds.
What about Blue Bonds?
Blue bonds are a fixed income instrument that are aligned with the Green Bond Principles, where the proceeds are exclusively dedicated to finance or refinance activities that contribute to ocean protection and/or improved water management and ocean restoration.
Blue bonds are a fixed income instrument that are aligned with the Green Bond Principles, where the proceeds are exclusively dedicated to finance or refinance activities that contribute to ocean protection and/or improved water management and ocean restoration. Blue bonds are a sector-based category that includes use-of-proceeds and KPI-linked bonds. They can be issued by companies, financial institutions, governments and municipalities for ocean-related assets and projects that deliver on the United Nations Sustainable Development Goals (SDGs).
Laconic’s Blue Bond Strategy aims to support private investment aligned with the Green Bond Principles and Green Loan Principles and which contributes to SDG 6 to “Ensure availability and sustainable management of water and sanitation for all,” and SDG 14 to “Conserve and sustainably use the oceans, seas and marine resources for sustainable development.” Investments in a sustainable ocean economy are not just critical for the ocean, but also represent an excellent value proposition.