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BME Admits ICO’s 500 Million Euro Eighth Social Bond

Date 25/11/2021

  • The issue matures in April 2025 and will be used to finance positive impact projects of self-employed workers, SMEs and Spanish companies
  • The volume issued was 2.5 oversubscribed, bringing the bond's yield down to -0.322%.
  • With this placement, the volume of ESG bond issues in BME's fixed-income markets reached 93 billion euros.

Today, the eighth issue of social bonds by Spain’s state-owned bank Instituto Oficial de Crédito (ICO), for an amount of 500 million euros and maturing on April 30, 2025, was admitted to trading on BME’s AIAF Fixed Income Market. The funds raised with this transaction will be used to finance projects of self-employed workers, SMEs and Spanish companies that have a positive social impact and contribute to boosting recovery and sustainable economic growth. These projects will be implemented with the support of the ICO Guarantee Lines, direct financing programmes and the funds managed by AXIS, its venture capital subsidiary.

The issue was oversubscribed by 2.5 times, which allowed it to be placed with a spread of 7 basis points over the same maturity Treasury benchmark. As a result, the yield was -0.322%.

ICO has an A/Baa1/A-/A rating from S&P, Moody's, Fitch and /DBRS.

The social bond admitted to trading today on the AIAF Market is part of ICO's strategy to contribute to the growth of the sustainable bond market by carrying out at least one transaction per year, which guarantees the channeling of funds to finance projects with a positive impact from a social and environmental point of view.

The issue, led by BNP, Citibank, HSBC and Banco Santander, was 75% placed with international investors. Fund managers acquired 48% of the volume issued, followed by insurers (30%), central banks and official institutions (14%) and banks (8%).

"The admission of this  new social bond from ICO increases the volume of ESG issues in BME's Fixed Income market to 93 billion euros, making us a clear benchmark in the field of sustainable financing," says Gonzalo Gómez Retuerto, General Manager of BME Renta Fija.