A bond whose proceeds are used only to finance or refinance a combination of both environ…

Approach: Distinguish between thematic bonds by identifying the specific 'use of proceeds' criteria defined by the International Capital Market Association (ICMA) principles.

- **Correct Answer:** (c) Sustainability Bond
- **Sustainability Bonds:** These are debt instruments where the proceeds are exclusively applied to finance or refinance a combination of both **Green (environmental)** and **Social** projects.
- **Distinguishing other options:**
- **Green Bonds:** Proceeds are earmarked strictly for projects with positive environmental outcomes (e.g., renewable energy, pollution prevention).
- **Social Bonds:** Proceeds are reserved for projects that address or mitigate a specific social issue or achieve positive social outcomes (e.g., affordable housing, food security).
- **Sovereign Bonds:** These are debt securities issued by a national government to support government spending and obligations; they are not inherently tied to environmental or social projects.

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