BancoEstado sets and important milestone in the local market after issuing the first social bond
It is the first financial institution to issue an ESG instrument in the local market, following the international market trends.
Following the guidelines of the Santiago Stock Exchange for “Green and Social Bonds” debt instruments, BancoEstado issued the equivalent of US$ 83 million, with a tenor of 4 years and a duration of 3.8 years.
The transaction was executed with a rate of 4.25%, equivalent to a spread over the Chilean Government Treasury of 40 basis points. The rating of the issuance given by the rating agencies was AAA (Feller) and AAA (Fitch), and Sustainalytics verifies the projects eligible.
BancoEstado keeps promoting financial inclusion through different programs supporting women, commercial platforms for minor size companies, geographic and digital coverage to allow access to the financial system, and mortgages to middle and low income segments.
According to this, Chief Financial Officer, Mr. Carlos Martabit comments: “the social role of BancoEstado is part of our mission”. And adds, “in our case, we have issued three social responsible instruments in the international market, targeting Asian investors in different currencies such as JPY, USD and AUD. The themes were Women Bond and Microfinance Bonds. Both, we as issuers and investors have generated certain conscious about the importance of these instruments, so it is important to continue developing this market.
At the occasion, Juan Andrés Camus, president of the Santiago Stock Exchange, congratulated BancoEstado for the success in the transaction, the second of the recently created “Green and Social Bonds Market”, allowing to finance or refinance projects that have a positive impact at an environmental level, or directly to a determined group of the population, or a combination of both.
This initiative is part of the vision of the Santiago Stock Exchange to develop the capital markets and offer new investment alternatives locally, in such a way of satisfying the demand of certain investors and provide an opportunity to those companies that have projects with features those investors are looking for”, Juan Andrés Camus highlighted.
The “Green and Social Bond” certification guarantees that the funds obtained will be used to finance project with positive environmental and social impact.
BancoEstado’s social print includes a real growth of 8.6% in minor size companies’ loans, 100% geographic coverage through the branches and CajaVecina network, the “Crece Mujer Emprendedora” program that accounts of 320 thousand women, and 23% of the mortgages accounts with governmental support, promoting financial inclusion.
Sustainalytics, acting as third party verifier, determined that the framework accomplished with the four pillars of the Social Bond Principals included in the International Capital Market Association (ICMA) guidelines.
The bond issuance was made in the Santiago Stock Exchange as Dutch auction, through BancoEstado S.A. Corredores de Bolsa as agent, with high interest from institutional investors, with a demand of 4x as peak in the orderbook.