FX Hedging Opportunities for Green Bonds in Latin America

Green Bond investors are not exempt from the foreign exchange risks in their portfolios. Besides, risks cannot be eliminated; however, they can be transferred through different financial structures or derivative products provided by the leading financial institutions. This is particularly true in well-developed and liquid capital markets but not so in emerging markets.



To tackle this challenge, TCX Fund offers global solutions to manage currency risk in developing and frontier markets for local currencies. This allows investors and bond issuers to protect themselves from any currency volatility.



Climate Bonds Initiative is aware of this risk and the critical role that hedging opportunities can play in developing the sustainable financial market in Latin America. FX hedging solution can help drive down the cost of capital for climate projects in the region and increase international investor's interest.