ICO launches the eighth public social bond issue for an amount of 500 million Euros
19 November 2021
- The funds raised with this bond issue will be used to finance public-private partnership projects that promote economic and territorial cohesion and have a positive impact on employment.
- 70% of the transaction has been placed among socially responsible investors, the highest percentage recorded in ICO's social bond issues, which proves the confidence of this type of investor in the Institutes' sustainable debt issues.
- The issue has been very well received by international investors, who have acquired 75% of the bonds.
- The transaction finalized today is ICO’s eleventh sustainable bond issue (eight social and three green), which strengthens ICO’s position as a European leader in this market with over 5,550 million Euros issued.
- With the issuance of social and green bonds, ICO is committed to promoting projects that generate a positive social and environmental impact, in line with the objectives established in the Recovery, Transformation and Resilience Plan.
Instituto de Crédito Oficial (with S&P/Moody's/Fitch/DBRS rating of A/Baa1/A-/A) has launched a new social bond issue for the amount of 500 million Euros to finance projects of Spanish self-employed workers, SMEs and companies that contribute to boosting recovery and sustainable economic growth.
The funds will be used to finance projects with a positive impact on employment, which promote economic and territorial cohesion, the construction of social housing or projects developed in the field of education and health, among others, in public-private partnership, through the different instruments available to it (ICO facilities, direct financing programmes and funds managed by AXIS, its venture capital subsidiary).
The social bond issued today is part of ICO's strategy to contribute to the growth of the sustainable bond market by issuing at least one transaction each year, ensuring that funds are channelled to finance projects with a positive social and environmental impact.
The issue has been well received by investors, who have registered purchase orders of over 1.3 billion Euros (more than 2.5 times the amount of the issue), which has allowed the operation to close with a differential of 7 basis points over the Treasury benchmark, reducing the starting price that had been set at 10 basis points. As such, the profitability has been set at -0.322%.
Likewise, it is worth noting the quality of the order book, 70% has been placed among socially responsible accounts (SRI), the highest percentage ever recorded in ICO social bond issues, which demonstrates investors’ confidence in the Institute as a sustainable debt issuer.
In terms of the geographical distribution, it should be noted that 75% of the bonds were placed with international investors, including those from France, Asia and the Middle East, and the United Kingdom.
Regarding the distribution by type of investor, it is worth noting the demand registered by fund managers, who acquired 48% of the total volume of the issue, followed by insurers with 30%, central banks and official institutions (14%) and banks (8%).
The issue, led by BNP, Citibank, HSBC and Santander Bank, expires on 30 April 2025 and is listed on BME's AIAF fixed income market.
ICO, reference issuer in green and social bonds
With this new issue, ICO has already carried out eight social bond issues and three green bond issues totalling 5,550 million Euros, which consolidates it as one of the benchmark issuers in Europe in the sustainable financing market.
ICO was a pioneer in Spain in the issuance of social bonds in which it is already a benchmark and with which it has managed to raise funds amounting to 4,050 million Euros to boost business activity in the most disadvantaged areas nationwide. Within this framework of action, it has financed more than 64,200 micro-company and SME projects that have generated and/or maintained 406,600 jobs.
In addition, ICO has carried out three green bond issues for an amount of 1.5 billion Euros, which to date have supported 22 projects of Spanish companies in the renewable energy and clean transport sectors, which have helped to prevent the emission of more than 578,000 tonnes of CO2.
With the issuance of social and green bonds, ICO commits to investors to promote projects that generate a positive social and environmental impact, in line with the objectives established in the Recovery, Transformation and Resilience Plan.