ICO consolidates its presence in the social bond market with a new issue of 500 million euros

06 June 2024

  • The demand registered by investors reached 2 billion euros, with international accounts accounting for 72% of the issue
  • With today’s transaction, the volume issued by ICO in social bonds reaches 5.55 billion euros, consolidating its position as one of the leading European issuers in this market
  • To date, the resources raised by the ICO with these issues have contributed to financing more than 73,000 business projects that foster job creation and promote social cohesion

The Official Credit Institute (ICO) (A/Baa1/A-/A-/A by S&P/Moody’s/Fitch/DBRS) has launched its eleventh issue of social bonds, amounting to 500 million euros, consolidating its position as one of the leading European issuers in the market for this type of operation.

The transaction has generated a lot of interest among investors, who have registered orders for 2 billion euros. This over-subscription has allowed the operation to close with a spread of 9 basis points over the Treasury benchmark at the same maturity, thus narrowing the starting price which had been set at a benchmark of 14 basis points. 

72% of the transaction was placed with international accounts, with demand from Italy, France and Asia being particularly strong. It is also worth noting that 55% of the investors who have participated in this transaction are investors who use ESG criteria in their investment decisions, which proves the market support for ICO social bonds.  

By type of investor, banks accounted for 48% of the issue, followed by fund managers, with 24% of the total issue volume. The share of central banks and official institutions is 19% and that of insurance companies and pension funds 9%. 

The transaction, which matures on 31 October 2029, pays a coupon of 3.05% and is listed on BME’s AIAF fixed income market. The banks leading the deal were Citi, JP Morgan, Natixis and Santander.

ICO social bonds

With today’s transaction, ICO’s social bond issues reach a volume of 5.55 billion euros. In this type of operation, the ICO makes a commitment to investors to promote projects that generate a positive social impact projects that generate a positive social impact.  To this end, it channels the funds it raises towards the business fabric through its public-private partnership financing programmes.

To date, ICO’s social bond issues have helped to finance more than 73,000 business projects, which have helped to create or maintain more than 478,000 jobs, as well as the construction of social infrastructure such as hospitals and housing.

The ICO’s activity in the sustainable bond market is complemented by green bonds to raise funds to finance projects that boost the green transition. In total, it has already launched 17 sustainable operations (11 social and 6 green), with a total issued amount of 8.55 billion euros. 

In addition, the ICO is a driver of the International Capital Market Association (ICMA) social bond benchmarks and is a member of the Advisory Council of the GBP and SBP Executive Committee.