Lenders Option Borrowers Option and Net zero: Difference between pages

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(LOBO).
''Environmental concerns - emissions''.


A long term borrowing instrument with periodic interest re-fixings, which incorporates two linked options:
Net zero emissions means that any greenhouse gas emissions are balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage.


#An option for the lender to set revised (usually higher) interest rates at predetermined interest reset dates - for example annually. This is the Lender's option.
#A linked option for the borrower (exercisable only if the Lender’s option is exercised) either to pay the revised interest rate, or else to redeem the bond. This is the Borrower’s option. 


== See also ==
* [[Adaptation Action Coalition]]
* [[Adaptation communications]]
* [[Business Ambition for 1.5C]]
* [[Carbon credits]]
* [[Carbon-neutral]]
* [[Climate-related disclosure]]
* [[COP26]]
* [[Credit rating]]
* [[Emissions]]
* [[Environmental concerns]]
* [[ESG investment]]
* [[Glasgow Financial Alliance for Net Zero]]  (GFANZ)
* [[Gold standard]]
* [[Green bond]]
* [[Green Bond Principles]]
* [[Greenhouse gas]]
* [[Hybrid]]
* [[Nationally determined contribution]]
* [[Net-Zero Asset Managers Initiative]]
* [[Net-Zero Asset Owner Alliance]]
* [[Net-Zero Banking Alliance]]
* [[Paris Agreement]]
* [[Resilience]]
* [[Road to Zero]]
* [[United Nations Framework Convention on Climate Change]]
* [[Zero emissions]]


LOBOs have been issued for maturities of up to 50 years.
[[Category:Accounting,_tax_and_regulation]]
 
[[Category:The_business_context]]
Each of the two embedded options can be complex to value with precision, potentially making the composite borrowing instrument difficult for some less sophisticated borrowers to evaluate.
[[Category:Compliance_and_audit]]
 
[[Category:Ethics]]
Also written 'Lender's Option Borrower's Option'.
[[Category:Identify_and_assess_risks]]
 
[[Category:Manage_risks]]
 
[[Category:Risk_frameworks]]
== See also ==
[[Category:Risk_reporting]]
* [[Option]]

Revision as of 22:40, 14 October 2021

Environmental concerns - emissions.

Net zero emissions means that any greenhouse gas emissions are balanced by schemes to offset an equivalent amount of greenhouse gases from the atmosphere, such as planting trees or using technology like carbon capture and storage.


See also

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