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IDB Invest launches USD1bn inaugural sustainability benchmark bond

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IDB Invest, the IDB Group’s private sector institution rated Aa1/AA/AAA, has raised USD1 billion in funding through a five-year fixed rate benchmark issue to support its strategy to reignite growth in Latin America and the Caribbean. 

This was IDB Invest’s inaugural benchmark issued under its newly released Sustainable Debt Framework, the first ICMA-aligned Sustainability Debt Framework from a high-grade multilateral development bank.

The five-year bond pays an annual coupon of 0.625 per cent and priced at mid-swaps plus 13 basis points, equivalent to 25 basis points above the five-year US Treasury bond. Credit Agricole CIB was the Sole Sustainability Advisor and BNP Paribas, Citigroup, Credit Agricole CIB and Goldman Sachs acted as joint bookrunners on the deal.

The transaction experienced strong demand with 45 investors across the globe participating and orders totalling more than 1.46 billion, the largest orderbook for an IDB Invest bond to date. The high level of demand reflects investors’ interest in IDB Invest’s sustainable development mission, strong credit profile and its Sustainable Debt Framework.

Central banks and official institutions took the lion share of the allocations at 74 per cent, followed by fund managers (12 per cent), bank/private banks (9 per cent), other accounts (3 per cent) and insurance/pension accounts (2 per cent). The investor base was very well diversified geographically, with with EMEA making up 56 per cent of the demand, Americas 24 per cent and Asia 20 per cent.

The net proceeds of the Sustainable Debt Bond issued under the Sustainable Debt Framework will be used to finance eligible green and social projects as defined in the issuer’s Sustainable Debt Framework.
 

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