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IDB Invest Launches $ 1 Billion Inaugural Sustainability Benchmark Bond

The bond proceeds will finance eligible green and social projects as set out in its new Sustainable Debt Framework supporting IDB Invest's strategy to reignite growth through the private sector in Latin America and the Caribbean

Published on February 08, 2021

IDB Invest, the IDB Group’s private sector institution rated Aa1/AA/AAA, raised $1 billion in funding through a 5-year fixed-rate benchmark issue to support its strategy to reignite growth in Latin America and the Caribbean. This was IDB Invest’s inaugural benchmark issued under its newly released Sustainable Debt Framework, the first ICMA-aligned Sustainability Debt Framework from a high-grade multilateral development bank.

The five-year bond pays an annual coupon of 0.625% and priced at mid-swaps plus 13 basis points, equivalent to 25 basis points above the 5-year U.S. Treasury bond. Credit Agricole CIB was the Sole Sustainability Advisor and BNP Paribas, Citigroup, Credit Agricole CIB, and Goldman Sachs acted as joint book-runners on the deal.

The transaction experienced strong demand with 45 investors across the globe participating and orders totaling more than 1.46 billion, the largest order book for an IDB Invest bond to date. The high level of demand reflects investors’ interest in IDB Invest’s sustainable development mission, strong credit profile, and its Sustainable Debt Framework.

Central banks and official institutions took the lion’s share of the allocations at 74%, followed by fund managers (12%), bank/private banks (9%), other accounts (3%), and insurance/pension accounts (2%). The investor base was very well diversified geographically, with EMEA making up 56% of the demand, Americas 24%, and Asia 20%.

The net proceeds of the Sustainable Debt Bond issued under the Sustainable Debt Framework will be used to finance eligible green and social projects as defined in the issuer’s Sustainable Debt Framework.

Finance Reporter