CABEI Isusues its first global Green Bond
By: CABEI News, Fondos Verdes, Sostenibilidad Ambiental
CABEI reaffirms its commitment to promote and support actions to finance climate change adaptation and mitigation programs and projects.
Tegucigalpa, November 1, 2019.- The Central American Bank for Economic Integration (CABEI) issued a US$375 million Floating Rate “USD Reg S Only” 5-year Green Bond, listed on both, the Luxembourg and Taipei Stock Exchanges, at a spread of 85bps over 3M-LIBOR (2.37% fixed rate equivalent).
The issuance engrossed an aggregate demand for approximately US$974 million, equivalent to an oversubscription of 3.2 times its original US$300 million announcement. Such demand was driven by Asian (75%) and European (25%) investors, including Banks, SSAs/Central Banks, Asset Managers, Broker Dealers and Private Banks among others, resulting in a well-diversified/high-quality transaction. The issuance’s Initial Price Guidance was tightened by 20bps, from 105bps to 85bps, resulting in a competitive final price.
The net proceeds of the Green Bond will be used to finance and/or refinance eligible Green Projects and Assets under CABEI’s Green Bond Framework, supporting strategic sectors with strong contributions to the Central American region’s transition to low-carbon economies, including sustainable land use, renewable energy, sustainable water management and clean transportation, among others. As such, it is important to highlight that the Second Party Opinion (SPO) on CABEI’s Green Bond Framework assessed it as robust, credible and in alignment with the four core components of the 2018 Green Bond Principles.
CABEI’s Executive President Dr. Dante Mossi stressed that this first global Green Bond issuance, in tandem with the Bank’s Zero Carbon Emissions pledge and its accreditations with global funds such as the Green Climate Fund and the Adaptation Fund, will further strengthen the Institution’s impact on the region’s resilience to climate change. In this context, Dr. Mossi stated that during the 2015-2018 period, CABEI approved US$3,659.5 million to finance climate change initiatives, which represents 37% of the Bank’s total loan approvals for the period and considers the channeling of approximately US$847.0 million in external funding from other development partners.
This first global Green Bond issuance coincides with CABEI’s approval to participate with a US$550 million tranche on Costa Rica’s Electric Passenger Train in San Jose’s Greater Metropolitan Area, an emblematic US$1,300.0 million project in Central America, which will substantially reduce carbon emissions, improving the area’s overall health and air quality.
CABEI’s financial strength as the best rated issuer in Latin America is supported by its international credit ratings with: Standard & Poor’s (AA/stable outlook) and Moody’s (Aa3/stable outlook).