CLAT Exam > CLAT Questions > Direction: Read the following passage careful...
Start Learning for Free
Direction: Read the following passage carefully and answer the questions given below:
The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.
Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.
Q. What was the significant outcome of India's sovereign green bond debut mentioned in the passage?
- a)It had a higher yield compared to the average India sovereign bond.
- b)It faced strong opposition from domestic ESG-aligned investors.
- c)It secured a "greenium" with lower yields than regular sovereign bonds.
- d)It struggled due to the absence of regulatory support.
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Direction: Read the following passage carefully and answer the questio...
The passage discusses the successful debut of India's sovereign green bond and highlights that it secured a "greenium." A "greenium" refers to a situation where the green bond is priced more attractively for investors compared to regular bonds, which means it offers lower yields. This outcome is significant because it demonstrates that investors were willing to accept lower returns for the green bond, indicating a strong demand for sustainable investments.
Most Upvoted Answer
Direction: Read the following passage carefully and answer the questio...
Significant Outcome of India's Sovereign Green Bond Debut
The successful debut of India’s sovereign green bond marked a pivotal moment in the country’s sustainable finance landscape, particularly highlighted by the achievement of securing a "greenium."
Understanding "Greenium"
- The term "greenium" refers to the lower yield achieved by green bonds compared to traditional bonds.
- In this case, India’s sovereign green bond was issued at a yield *six basis points lower* than the average India sovereign bond in the first round and *four basis points lower* in the second round.
Implications of the Greenium
- The achievement of a greenium indicates strong market confidence and readiness for sustainable investments, despite challenges such as:
- Sluggish global growth.
- Rising global interest rates.
- Pressure on the rupee.
- This outcome is significant as it suggests that there is an appetite for green investments among international investors, which had been a concern prior to the issuance.
Regulatory Support and Future Prospects
- The supportive regulatory framework played a crucial role in facilitating this successful issuance.
- It signals potential for larger volumes of local currency sovereign green issuances in the future, further enhancing the "greenium."
In summary, the significant outcome of India's sovereign green bond debut is encapsulated in the successful establishment of a greenium, which sets a positive benchmark for future sustainable financing and indicates robust market interest.
The successful debut of India’s sovereign green bond marked a pivotal moment in the country’s sustainable finance landscape, particularly highlighted by the achievement of securing a "greenium."
Understanding "Greenium"
- The term "greenium" refers to the lower yield achieved by green bonds compared to traditional bonds.
- In this case, India’s sovereign green bond was issued at a yield *six basis points lower* than the average India sovereign bond in the first round and *four basis points lower* in the second round.
Implications of the Greenium
- The achievement of a greenium indicates strong market confidence and readiness for sustainable investments, despite challenges such as:
- Sluggish global growth.
- Rising global interest rates.
- Pressure on the rupee.
- This outcome is significant as it suggests that there is an appetite for green investments among international investors, which had been a concern prior to the issuance.
Regulatory Support and Future Prospects
- The supportive regulatory framework played a crucial role in facilitating this successful issuance.
- It signals potential for larger volumes of local currency sovereign green issuances in the future, further enhancing the "greenium."
In summary, the significant outcome of India's sovereign green bond debut is encapsulated in the successful establishment of a greenium, which sets a positive benchmark for future sustainable financing and indicates robust market interest.
|
Explore Courses for CLAT exam
|
|
Top Courses for CLATView all
Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer?
Question Description
Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? for CLAT 2025 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer?.
Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? for CLAT 2025 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT.
Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.
Here you can find the meaning of Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Direction: Read the following passage carefully and answer the questions given below:The successful debut of India’s sovereign green bond is a landmark event for its emerging sustainable finance ecosystem. Issued in two tranches of $1 billion each, the rupee denominated onshore debut was heavily oversubscribed at a six-basis point lower yield than the average India sovereign bond in the first round, and four basis points lower in the second round. This unexpected “greenium” marks an encouraging benchmark for future sustainable sovereign and corporate debt. The greenium’s positive signalling effect is substantial. It was secured against two major odds: The headwinds due to sluggish global growth, rising global interest rates and downward pressure on the rupee, which offered suboptimal conditions for international investors to buy into a local currency denominated offering. Second, the near absence of a domestic ESG (Environmental, social and governance) aligned investor base had raised scepticism about local investor appetite. The result shows that the market readiness for the green label exists and can be propelled with supportive regulatory/policy action. The greenium could become more sizeable with larger volumes of local currency sovereign green issuances both in onshore and offshore markets. The strategic co-benefits of sovereign issuance are bigger than the gains made on an individual issuance. According to a BIS paper, “After (the inaugural) issue, the annual number of corporate issues tends to increase across jurisdictions.” This happens due to demonstration effects. A 2021 sovereign issuers’ survey carried out by the Climate Bonds Initiative, reported that diversification of the investor pool and creation of a local green bond market are major motivators for most sovereign issuers. This was not a stated aim of the Indian authorities, but the regulatory support extended to investors will help do just that and will pave the way for better incentive structures.Transparency on the use of green bond resources for credible sustainable projects is vital. Budget 2023 carries the list of projects and expenditures which will be financed by the sovereign green borrowing. The Centre’s Green Finance Working Committee has done well to largely stick to the dark green categories of expenditures, in terms of volume, within those marked as ‘medium to dark green’ in the second party opinion (SPO) it received on its Green Bond framework. The allocations to MNRE (KUSUM, solar and wind power (grid scale), the National Green Hydrogen Mission), and the Ministry of Railways (three metro project lines and energy efficient electric locomotives) clearly fall in this category. The MoEFCC (National Afforestation Programme) allocation comes under the light green category in the SPO, implying that its long-term effects on climate mitigation or resilience are unclear. The Ministry of Housing and Urban Affairs allocation for equity investment in metro projects stands out. Investors care for integrity and adhering to the best norms on evaluation and selection of projects is important. To build on the success of the sovereign green bond in India’s G20 Presidency, here are two suggestions: Foster a programme to grow local currency sovereign green issuances by emerging economies to avoid external debt traps and generate a larger pipeline of sustainable projects for national and global capital markets. Define and label sustainable activities through interoperable frameworks/taxonomies to guide capital flows. Definitions that can work seamlessly for global and local investors will help identify credible project pipelines and expenditures.Q.What was the significant outcome of Indias sovereign green bond debut mentioned in the passage?a)It had a higher yield compared to the average India sovereign bond.b)It faced strong opposition from domestic ESG-aligned investors.c)It secured a "greenium" with lower yields than regular sovereign bonds.d)It struggled due to the absence of regulatory support.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CLAT tests.
|
|
Explore Courses for CLAT exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup