• It is the first gender bond issued by a multilateral development bank in Latin America and the Caribbean.
• It is the second issuance of IDB Invest under its sustainable debt framework, which consolidates the institution’s commitment to the social, gender and inclusion agenda in the region.
IDB Invest, the private sector institution of the IDB Group, issued a gender social bond worth 2,500 million Mexican pesos (equivalent to approximately $122 million) with a three-year maturity in Mexico. This is the largest IDB Invest bond issue in Mexico to date and has been listed on the Mexican Institutional Stock Exchange (BIVA). The funds raised will finance projects aimed at promoting gender equality and the empowerment of women in the region, thus helping to advance the United Nations Sustainable Development Goal Number 5, “Gender Equality”.
The gender social bond is the second issuance by IDB Invest under its new sustainable debt framework, which was published in February this year. This framework allows IDB Invest to issue green, social or sustainable bonds and complies with the Green Bond Principles and Social Bond Principles published by the International Capital Markets Association (ICMA). The sustainability rating agency Vigeo Eiris has issued an independent verification, known as a second-party opinion, confirming the alignment of the IDB Invest framework with the principles published by ICMA and has also assigned it the highest rating within its contribution-to-sustainability scale.
The issue received local ratings of mxAAA by S&P Global Ratings and AAA.mx by Moody’s, respectively. BBVA and HSBC acted as underwriters in the deal. The transaction was 1.5 times oversubscribed, with orders worth more than 3.8 billion Mexican pesos from 29 institutional investors. Strong demand allowed underwriters to reduce the rate during the placement, from the initial indicative price of 3 basis points to 0 basis points over TIIE 28. Investment funds accumulated 64% of the bonds issued, followed by government institutions with the 22%, bank treasuries with 8%, insurance companies with 2% and 4% distributed to pension funds, corporate treasuries and other investors.
The successful result reflects the great interest of investors in Mexico for sustainable bonds and is a recognition of IDB Invest’s commitment to the empowerment of women in Latin America and the Caribbean. Eusebio Garre, Head of Funding at IDB Invest, said: “We are very satisfied with the success of this important issue and the excellent reception it has received from Mexican investors. During this year we have planned several sustainable bond issues in different international markets. In addition, we expect to launch our sustainable commercial paper issuance program shortly, which will be the first sustainable short-term debt program of a multilateral development bank.”
“This bond shows our commitment to help expand market access and close the financing gap for more than 1,200 women-led MSME in Mexico. According to the national survey on financial inclusion, 46% of women do not have any credit. Those who trusted on the issuance by IDB Invest and invested in this bond are contributing to change this reality,” said Roberto Manrique, IDB Group Representative in Mexico.
The issuance of this gender bond demonstrates IDB Invest’s determined commitment to contribute to closing the financing gap for women and is part of the institutional strategy to develop investment with a gender lens in the region. Since 2019, IDB Invest has structured and subscribed the issuance of four bonds of this type: with Banistmo in Panama in 2019 – the first in Latin America – and, in 2020, with Davivienda, Banco W in Colombia and Caja Arequipa in Peru.
This is the second thematic issue of the institution within its strategy to promote sustainable investment in Latin America and the Caribbean, which will be the engine to achieve a green and inclusive recovery after the pandemic. To date, IDB Invest has supported 20 clients in different thematic issues: six green, eight social – including four on gender – and six sustainable issues.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in assets under management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.