ICO launches its first green bonds issue and reaffirms its status as one of the main issuers of sustainable bonds on the European market
- The 500 million euro issue had a demand of over 3,400 million
- The funds will be used to finance projects that contribute to protecting the environment and the fight against climate change
- 84% of the issue was acquired by international investors
Instituto de Crédito Oficial (ICO) has launched its inaugural green bonds issue amounting to 500 million euros. Demand has exceeded 3,400 million euros, surpassing the average of ICO¿s transactions. The six times oversubscribed transaction allowed the operation to close with a spread of 7 basis points on the Treasury¿s reference at the same maturity, the lowest achieved by the ICO in its "benchmark¿ operations.
The issue, led by BNP Paribas, Crédit Agricole CIB, ING and Banco Santander, offers a coupon of 0.20% and has a maturity of 5 years.
The borrowed funds will be used to finance projects undertaken by Spanish companies that contribute to protect the environment and the fight against climate change. In particular, as set out in ICO¿s framework programme for green bonds, projects relating to renewable energy, energy efficiency, clean transport, pollution prevention and control, sustainable management of natural resources and land use and sustainable water management, will be funded. The programme will also allow the impact of the eligible projects and their contribution to sustainable development objectives to be measured, all within the framework of the "Green Bond Principles" issued by ICMA.
In terms of the geographical distribution, it should be noted that 84% of the bonds were placed among foreign investors, including those from Germany and Austria (25%) and Benelux (17%). The participation of accounts from Asia and the Middle East has also been remarkable, where 16% of the issue was placed.
ICO held meetings with 34 investors in 7 European markets during a successful deal-related roadshow prior to this issue. Many of these international investors subscribed the issue, which has allowed ICO to broaden its investor base with new investors focused solely on the purchase of this class of bonds.
Regarding the distribution by type of investor, it is worth highlighting the demand registered by fund managers, who acquired 31% of the total volume of the issue, followed by central banks and official institutions (28%) and banks (26%). The rest of the issue was placed among insurers and pension funds.
It should also be noted that 65% was distributed among investors with environmental and sustainable investment criteria.
This issue is in line with the Green Bond Principles of ICMA (International Capital Markets Association) and has the validation of Sustainalytics, one of the leading companies in the analysis of corporate social responsibility. ICO, reference European issuer in sustainable bonds
With the issue carried out today alongside the five social bond previous issues, amounting to over 2,550 million carried out so far, ICO is a reference issuer in the sector of sustainable bonds on the European market. In these social bond issues, ICO aims to finance the projects of companies located in Autonomous Communities with a GDP per capita below the Spanish average, with the aim of promoting inclusive economic growth and the necessary improvement in income distribution.
With this new issue, the public bank consolidates its position within what the international capital markets call "sustainability bonds¿. The funds of this type of issue are used to finance operations that generate a positive social or environmental impact. With this issue, ICO reinforces its position in a specialised market centred on fostering an economy ought to be focused on sustainable development.
In addition to occupying a prominent role in sustainable financial markets, ICO works to advance sustainability as the backbone of its activity and as an essential part of its Corporate Social Responsibility policies.