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February 17, 2023

Any move to restrict issuers from issuing labeled bonds or more broadly consider ESG
factors would be “ill-advised,” said Barry Fick, executive director of the Minnesota
Higher Education Facilities Authority, which has issued labeled bonds with more deals
coming this year. He has said the green label drove demand for a 2022 deal priced by
the authority.

“It’s not something that’s suddenly new and thought up by individuals who are saying we
have a liberal agenda,” Fick said. “If you look at the majority of the items and the factors
that are included in the ESG analysis, most of them are items that are normally looked
at it in credit rating analysis and by investors anyway,” he said. “The restrictions would
mean less information than we have always provided for a multiple number of years, so
[now] investors are going to say, ‘I’m going to have less information than I had before
ESG and now my risk increases, so I’m going to have to accommodate that risk by
either charging a higher interest rate or asking for more difficult covenants.'”

Read the full Bond Buyer Article, “DeSantis spotlights issuers in escalation of red state anti-ESG movement”