Public debt

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Public debt, what it is?

Public debt securities are publicly traded fixed income securities that can be assigned different credit ratings based on the creditworthiness of the issuers.          

  • Investment grade securities: Bonds issued by stable companies with a low risk of default.

  • High yield securities: Also known as non-investment grade bonds, high yield securities have low credit ratings due to a higher probability of default. Therefore, investors can require a higher interest rate from these debt securities.

Types of debt securities

Common types of debt fixed income securities within impact investing funds where the Fund Manager tracks and reports impact outcomes of the capital include:

  • Green bonds: Bonds issued specifically to fund investments that provide environmental benefits. We look for Funds that invest in issuers providing or aiming to provide a firm-level rating based on carbon intensity (emissions relative to revenue) to complement existing project-based labels.  

  • Municipal and community infrastructure bonds: Bonds issued by municipal governments to finance public infrastructure, hospitals and schools in underserved communities.

  • Affordable housing bonds: Bonds issued by governments dedicated to funding affordable housing projects to lower-income families.

According to our Impact Database, public debt funds make up 3.9 % of the funds tracked by the database with 3.5 % of the current fundraising.

Most targeted SDGs

SDG 7 Affordable and Clean Energy is the top targeted Sustainable Development Goal both historically and for open funds, followed by SDG 13 Climate Action, SDG 9 Industry, Innovation and Infrastructure, SDG 8 Decent Work and Economic Growth and SDG 3 Good Health and Well-Being.

 

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