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The Central American Bank for Economic Integration (CABEI), which has the highest rating for a Latin American issuer of AA/Aa3 by S&P/Moody’s, has priced the largest issue in its history with the placement of a US$1.5 billion three (3) year Global Sustainable Bond.
This historic issuance represents an important benefit for the Government of El Salvador, as it ensures the availability resources to finance sustainable development projects in critical areas such as infrastructure, education, health, and the environment. By having the backing of an institution with a high credit rating, the country can access more favorable financing, which reduces the costs associated with its investment programs.
The 144A/Reg S issue with maturity in 2028 and a fixed coupon of 4.75%, constitutes the Bank’s most relevant transaction in the capital markets and consolidates its position as a recurring issuer in the global benchmark market.
The transaction generated a book of bids totaling more than US$4 billion, 2.7 times the amount issued, thanks to the interest of more than 110 high-quality investors globally distributed, interested in sustainable instruments of high credit quality. The issuance was primarily allocated to Central Banks/Official Institutions (65%), Asset Managers/Insurers/Pension Funds (22%) and Banks/Treasuries (10%), highlighting the market’s confidence in CABEI’s financial strength.
Likewise, the Sustainable label of the issuance demonstrates the Bank’s leadership in sustainable finance as a benchmark ESG (environmental, social and governance) issuer, having issued more than US$6.9 billion in sustainable bonds, representing more than 58% of total fundraising since the first foray into ESG capital markets in 2019. The proceeds from the issuance will be used to finance or refinance social, green and blue projects, in accordance with the criteria established in CABEI’s Sustainable Bond Framework. In this way, CABEI will continue to promote the comprehensive and sustainable development of the region through high-impact projects.
CABEI Executive President, Gisela Sánchez, saidd, “We are very pleased with this new and historic global issuance, with which we continue to consolidate ourselves as a sustainable issuer committed to the region’s development”. President Sanchez also highlighted “we are pleased with the reaction and commitment of our investors and the crucial role of member countries in contributing to strengthen our franchise value in the capital markets”. The outstanding issuance reaffirms investor confidence in CABEI’s financial soundness within the framework of its renewed financial strategy, which advocates prudent and conservative management of its balance sheet based on a focus on technical rigor, cost optimization, operational efficiency and the integration of ESG aspects.
