Proceeds to finance­­­ eligible social projects to promote private sector development in Latin America and the Caribbean

IDB Invest, the IDB Group’s private sector institution rated Aa1/AA+/AAA, has raised €650 million through a five-year, fixed-rate social bond benchmark issuance.

This is IDB Invest’s inaugural euro-denominated bond and follows the publication of its first Sustainable Bond Allocation and Impact Report earlier this year.

The five-year bond pays an annual coupon of 3.125 per cent and is priced at mid-swaps plus 12 basis points. Bank of America, BNP Paribas, Deutsche Bank and DZ Bank acted as joint bookrunners on the deal.

32 INVESTORS PUTTING IN ORDERS FOR MORE THAN €1 BILLION

Demand for the transaction was strong, with 32 investors putting in orders for more than €1 billion.

Central banks and official institutions took the lion’s share of the bonds with 49 per cent, while the remaining was shared between asset managers (25%), banks (20%), and insurance/pension funds (6%).

In terms of geographical distribution, the split is highly diversified. Benelux and Switzerland lead with 22 per cent and 21 per cent of the allocations, followed by Asia with 14 per cent, other Europe with 12 per cent, while UK/Ireland accounts with 11 per cent, France with 10 per cent and, finally, Germany with 10 per cent.

IDB Invest’s inaugural Sustainable Bond Allocation and Impact Report, released in October, includes impact from $1 billion in sustainability bonds, $424 million in social bonds and $186 million in green bonds, which financed green and inclusive private sector projects across Latin America and the Caribbean.

The report marked a milestone for IDB Invest as a pillar of its Sustainable Debt Framework.

Established last year, this framework allows IDB Invest to issue green, social and sustainability bonds, and to develop its offering as a supranational bond issuer with thematic bonds that reflect its overall approach to impact and ESG investing. IDB Invest is the first supranational to establish a sustainability bond programme that allows for the issuance of green, social and sustainability bonds from the same framework.

This landmark transaction, IDB Invest’s first euro-denominated issuance, provides European investors with the unique opportunity to invest in Latin America and the Caribbean’s private sector through a supranational issuance.

IDB Invest’s entry into the euro market furthers its commitment to economic growth, social inclusion and sustainable development in Latin America and the Caribbean. The social’s bonds proceeds will finance eligible green and social projects defined in the issuer’s Sustainable Debt Framework.

The euro bond’s launch comes almost exactly 10 years after IDB Invest’s first foray into global capital markets.