- The issuance of 500 million euros has had a demand of more than 3,400 million
- The funds will be used to finance projects that contribute to the protection of the environment and the fight against climate change
- 84% of the issue has been acquired by international investors
The Official Credit Institute (ICO) has launched its inaugural issuance of green bonds for 500 million euros. The demand has exceeded 3,400 million euros, which shows the interest of investors and represents six times the amount of the issue, exceeding the usual average of ICO transactions. This fact has allowed the operation to close with a spread of 7 basis points over the Treasury reference at the same time, the lowest achieved by ICO in its benchmark operations.
The issue, directed by BNP Paribas, Crédit Agricole CIB, ING and Banco Santander, offers a coupon of 0.20% and has a term of 5 years.
The funds will be used to finance projects carried out by Spanish companies that contribute to the protection of the environment and the fight against climate change. Specifically, as established in the ICO green bond framework program, renewable energy, energy efficiency, clean transport, pollution prevention and control, sustainable management of natural resources and land use and sustainable management projects will be financed of the water. The program will also allow the measurement of the impact of eligible projects and their contribution to the Sustainable Development Goals, all within the framework of the “Green Bond Principles” issued by ICMA.
In the geographical distribution, it should be noted that 84% of the bonds have been placed among foreign investors, including those of Germany and Austria (25%) and Benelux (17%). The participation of accounts from Asia and the Middle East has also been notable, where 16% of the paper has been placed.
The ICO conducted a roadshow prior to this issue, in which 34 investors were visited in 7 European seats. Many of these international investors have subscribed the issue, which has allowed the ICO to expand its investment base with new entities focused solely on the purchase of this class of bonds.
The distribution by type of investor highlights the demand registered by fund managers, who have 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 has been placed between insurers and pension funds.
It should also be noted that 65% has been distributed among investors with environmental and sustainable investment criteria.
This issue is aligned with the Green Bond Principles of ICMA (International Capital Markets Association) and has the verification of Sustainalytics, one of the leading companies in corporate social responsibility analysis.
ICO, European reference issuer of sustainable bonds
With the issuance made today along with the five social bond issues, amounting to more than 2,550 million made so far, the ICO is a reference issuer in the sustainable bond sector of the European market. In these social bond issues, the ICO undertakes 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 of income distribution.
With this new issue, the public bank strengthens its position within what is called in the international capital markets “sustainability bonds” or sustainable bonds. The funds of this type of emissions are used to finance operations that generate a positive social or environmental impact. With this issue, the ICO strengthens its position in a more specialized market and focused on promoting an economy more focused on sustainable development.
In addition to occupying a prominent role in sustainable financial markets, ICO works to promote sustainability as the backbone of its activity and as an essential part of Corporate Social Responsibility policies.
