The ICO launches its fifth green bond Issue for 500 million euros, strengthening its position as an issuer in the sustainable bond market
08 February 2023
- The bond issue was extremely well-received, reaching a demand of more than 4.5 billion, i.e. an over-subscription of more than 9 times the target amount.
- 81% of the operation has been placed with international accounts, which shows the confidence of the investor base in ICO's role as a sustainable bond issuer.
- The funds raised will be used to finance sustainable projects carried out by Spanish companies with the aim of boosting the ecological transition.
The Official Credit Institute (Spanish; Instituto de Crédito Oficial: ICO) has issued its fifth green bond for 500 million euros with the aim of financing projects carried out by Spanish companies that contribute to boosting the ecological transition and the development of sustainable finance, in line with the objectives of the National Plan for Recovery, Transformation and Resilience.
The transaction has been extraordinarily well-received by investors, with the order book closing with a demand of over €4.5 billion - more than nine times the amount issued - from 147 accounts. This amount represents a remarkable milestone in the history of ICO issues, as it is the most over-subscribed transaction to date.
The quality of the order book is reflected in the participation of international accounts, among which 81% of the operation was distributed, a sign of investor confidence in the ICO, both in its role as issuer of green bonds and in the activity it carries out as a national promotional bank financing projects that promote the ecological transition. It should also be noted that 62% of the issue was placed among sustainable investors.
The high demand has allowed the spread over the Treasury benchmark at the same term, which was initially set at 27 basis points, to be adjusted to an intermediate spread of 24 basis points and finally set definitively at 22 basis points.
The operation has a term of nearly five years and has been led by Crédit Agricole (CACIB), Citi, HSBC and Santander and has a yield of 3.076%.
In terms of geographic distribution, Asian and French investors were particularly interested, each acquiring 17% of the issued amount, followed by investors from Germany and Austria, each acquiring 16%.
In the distribution by type of investor, central banks and official institutions accounted for 30% of the total amount of issuance, fund managers for 30%, followed by banks (28%) and insurance companies and pension funds (12%).
The fifth green bond issued today is part of ICO's strategy to contribute to the growth of the sustainable bond market, which ensures the channelling of funds to fund projects tied to sustainability from a social and environmental point of view. With the first three operations, whose impact reports have already been published, the ICO has so far promoted 30 renewable energy and clean transport projects by Spanish companies, which have mobilised an investment of approximately 13,000 million euros and will prevent the emission of more than 692,000 tonnes of CO2 per year.
This new operation brings the number of green bonds issued by the ICO to 2.5 billion euros and reinforces its commitment to the development of the market for this type of transaction.
The ICO consolidates its position as a benchmark issuer in the European sustainable bond market, with fourteen issues (9 social and 5 green) for an amount of 7,052 million euros that are channelled towards projects of Spanish companies to promote sustainable growth.