Crédit Agricole CIB Acted as a Sustainability Structuring Advisor and Active Joint Bookrunner for First-Ever Sovereign Sustainability-Linked Bond
11 Marzo 2022 - 12:30PM
Business Wire
Crédit Agricole CIB acted as a Joint Sustainability Structuring
Advisor for the Republic of Chile’s Sustainability-Linked Bond
Framework as well as an Active Joint Bookrunner on the Sovereign’s
inaugural USD Sustainability-Linked Bond transaction. This was the
first ever Sustainability-Linked Bond from a Sovereign anywhere in
the world.
On March 2, 2022 following three days of investor marketing, the
Republic of Chile sold USD 2 billion of 20-year
Sustainability-Linked Bonds (“SLB”). The issue was priced to yield
4.340%, 200 basis points over 20-year US Treasury notes, after
compressing 40 bps from the syndicates’ initial price thoughts. In
a volatile market that required elevated new issue concessions from
most issuers, the final pricing achieved by the new 20-year SLB
benefited from a “greenium,” compared to a conventional
issuance.
Proceeds will be used for general budgetary purposes of the
Republic. The coupon will be subject to a step-up should the
country fail to meet Sustainability Performance Targets (SPTs) tied
to two Key Performance Indicators (KPIs) outlined in Chile's
Sustainability-Linked Bond Framework -- (1) Greenhouse Gas (GHG)
Emissions, derived directly from Chile’s updated Nationally
Determined Contribution (NDC) and (2) Non-Conventional Renewable
Energy production for the country.
Romina Reversi, Head of Sustainable Investment Banking for the
Americas at Crédit Agricole CIB, noted, “We are proud to have
assisted Chile in structuring the first-ever Sovereign
Sustainability-Linked Bond Framework and in pioneering the
Sovereign Sustainability-Linked Bond format. We hope Chile’s
alignment of its debt financing strategy and international
environmental commitments will inspire other countries, both in
Latin America and elsewhere in the world, to do the same.”
The Sustainability-Linked Bond Framework, written in alignment
with the five core components of the Sustainability-Linked Bond
Principles, 2020, underwent an external assessment and received a
Second Party Opinion from Sustainalytics, a Morningstar, Inc.
company, and an independent provider of ESG and corporate
governance research, ratings and analytics. The opinion found KPI1
to be “very strong,” KPI 2 to be “strong,” and considered the
associated SPTs to be “ambitious” and “highly ambitious,”
respectively.
Through this Sustainability-Linked Bond, the Ministry of
Finance, in cooperation with the Ministries of Environment and
Energy, is further expanding its commitment to sustainable
development. This SLB Framework, in conjunction with Chile’s
existing Sustainable Bond Framework (2020), will provide clear and
transparent information to the market related to all future Green,
Social, Sustainable, and Sustainability-Linked Bonds (SLBs).
“We are proud and humbled to have been mandated once again by
the Republic of Chile team, especially to be a part of this
innovative offering that has yielded such positive feedback from
investors worldwide. This was possible thanks to months of teamwork
that began with the Republic of Chile’s new SLB framework and
concluded in a successful issuance, further strengthening our
relationship with the Republic of Chile, and its consolidation as
sovereign leader in ESG bonds,” said Jorge Ramírez, Senior Country
Officer for Chile at Crédit Agricole CIB.
Chile became the first country in the Americas to issue Green
Bonds in 2019 and continued its commitment as a leader in
sustainability by issuing its first Social Bond transaction in 2020
and thereafter an inaugural Sustainability Bond deal in 2021. ESG
instruments now constitute approximately 30% of Chile’s outstanding
sovereign debt.
About Crédit Agricole Corporate and Investment Bank (Crédit
Agricole CIB)
Crédit Agricole CIB is the corporate and investment banking arm
of Credit Agricole Group, the 12th largest banking group worldwide
in terms of tier 1 capital (The Banker, July 2021). Nearly 8,600
employees across Europe, the Americas, Asia-Pacific, the Middle
East and Africa support the Bank's clients, meeting their financial
needs throughout the world. Crédit Agricole CIB offers its large
corporate and institutional clients a range of products and
services in capital markets activities, investment banking,
structured finance, commercial banking and international trade. The
Bank is a pioneer in the area of climate finance, and is currently
a market leader in this segment with a complete offer for all its
clients.
For more information, please visit www.ca-cib.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20220311005416/en/
For further information, please
contact: Crédit Agricole CIB Jenna Lee - Head of
Communications for the Americas CACIB Americas @
jenna.lee@ca-cib.com Tel: + 1 212 2617328
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