CABEI issues the first ever Social Recovery and Reconstruction COVID-19 bond in the Mexican market
Tegucigalpa, June 22, 2021.- The Central American Bank for Economic Integration (CABEI) has reached multiple milestones by issuing its first ever Social Recovery and Reactivation COVID-19 bond in the Mexican market and the first of its kind worldwide, becoming the largest Social issuance in Mexico and with the lowest cost in the last decade in the aforementioned market. With this second Social issuance in 2021, the first one was issued on the 144-A market in february of this year, CABEI confirms its commitment to the reactivation and recuperation of the economic region, as well as with the innovation in the ESG international markets.
This issuance received a strong demand of 1.76 times the original amount of the issuance, reaching MXN 5.278 billion, allowing CABEI to raise MXN 5 billion at TIIE -30 bps with a 3-year tenor equivalent to US$ 245 million. It is important to note that the bond was issued based on CABEI´s Social Bond Framework that abides ICMA´s Social Bond principles, this framework received a solid and robust Second-Party Opinion from Sustainalytics a well-known name in the ESG markets.
Main investors came from specialized funds with 44% participation, treasuries of banks with 34%, money markets with 20% and additional private banks and investor. The net proceeds from these notes will be focused on providing funds to the Central American countries to finance or refinance social projects that target the reactivation of SMEs, support to vulnerable groups, provide the basic health infrastructure and the must needed medical supplies for the region and other initiatives that derive from the “Emergency COVID-19 Support and Preparedness and Economic Reactivation Program” approved in 2020.
Historically, Mexico is one of CABEI´s main markets for bond issuances, as of today, the Bank has issued 23 notes in the mexican market for more than US$ 2.5 billion which represents aproximately 20% of CABEI´s historical issuances. Likewise, Mexico has been a member of CABEI since 1992 as a non-regional member and continues to play a key role in Central America´s economic growth and socioeconomic development and a solid partner in time of crisis brought by the pandemic. Due to its importance for the Bank and the region, CABEI foresees to continue visiting the market for the upcoming years.
CABEI´s Executive President, Dr.Mossi stated “With this second Social Bond issuance in 2021, CABEI seeks to support the Emergency COVID-19 Support and Preparedness and Economic Reactivation Program to counter the negative economic and health effects brought by the pandemic in Central America, CABEI has a strong commitment in the region with sustainable debt issuances with the sole purpose to continue serving the development and economic reactivation of Central American region specially during times of adversity.”