The Central American Bank for Economic Integration (CABEI) has issued a 10-year blue bond amounting to 7 billion yen (US$53.7 million) and a 10-year social bond worth US$130 million to Japanese and Taiwanese institutional investors.
Citi was appointed the sole arranger of the deal. Citigroup Global Markets Japan and Citigroup Global Markets Taiwan Securities are the distributors, with Citigroup Global Markets Limited as the underwriter.
The ESG bonds were rated Aa3 by Moody's and AA by S&P; both ratings were without registration.
CABEI established its green bond framework in 2019 followed by a social bond framework in 2020 and a green and blue bond framework in 2022. The frameworks are aligned with the International Capital Market Association’s Green Bond Principles and Social Bond Principles.
The funds raised will be used to finance projects within eligible categories. These include water resource protection, sustainable water management, renewable energy, blue economy, and nature protection under the blue bond framework. Within the social bond framework, access to essential services, employment generation, socio-economic empowerment, affordable basic infrastructure, food security and sustainable food systems will be prioritized.
The blue bond carried an interest rate of 1.265% while the social bond had an interest rate of 4.900%.
Japanese and Taiwanese institutional investors supported CABEI’s ESG bonds to demonstrate their support for sustainable growth in Central America, according to Citi.
This marks the first successful joint effort between Citigroup Global Markets Japan and Citigroup Global Markets Taiwan Securities to distribute an ESG bond private placement club deal for investors from the two markets.