Proceeds from $500 million transaction will finance IDB project loans in three key sectors
The Inter-American Development Bank (IDB or IADB), rated Aaa/AAA (Moody’s/S&P), priced today a $500 million 4-year fixed rate global bond under the Education, Youth, and Employment (“EYE”) Bond program.
This transaction represents the IDB’s inaugural EYE bond issuance, the proceeds of which will be directed to fund IDB project loans eligible under the EYE Bond program criteria. IDB EYE Bond program projects, like all of the Bank’s projects, are designed to promote sustainable growth, poverty reduction and social equity in Latin America and the Caribbean. However, EYE projects specifically focus on education, youth and employment.
“The EYE bond is an innovative instrument designed to bring additional resources and awareness to bear on three key priorities for Latin America and the Caribbean,” said IDB President Luis Alberto Moreno. “The projects that will benefit from these investments will contribute to improving the quality of children’s education, increasing productivity and enhancing the skills of young people entering the job market.”
“IDB’s EYE bond enables investors to participate in financing innovative projects that lead to increased social and economic inclusion of youth, including greater employment opportunities,” said Bob Annibale, Global Director of Citi Microfinance. “A range of institutional and mission-related investors, including foundations, pension funds and family offices, find the AAA-rated securities attractive because they align with their values, missions and risk guidelines.”
"Daiwa is honored to have been involved in the introduction of IDB’s new EYE Bond program," said Takashi Hibino, President, Daiwa Securities Co., Ltd. "Back in 2010, Daiwa sponsored IDB’s first socially responsible investment-themed offering in Japan and since that time we have seen increased demand for environmental, social and governance (ESG) product from our investors all over the world. We applaud the IDB in bringing to the international investment community the opportunity to participate in their 'life cycle' approach of enriching the lives of young people in Latin America and the Caribbean. As an institution focused on social development, Daiwa regards the EYE bond as the next stage in the evolution of the ESG capital markets.”
The bonds were sold to 24 investors including Accion, AP2, The Bank of Korea, Breckinridge Capital Advisors, The Chugoku Bank, Ltd., Mirabaud & Cie Geneva, Nikko Asset Management Europe, Nordea Funds, Praxis Intermediate Income Fund, Taiyo Life Insurance Company, Threadneedle UK Social Bond Fund, TIAA-CREF Asset Management, United Nations Development Programme, and Zurich Insurance Group.Investor Distribution
Investor TypeAmericas 53% Central Banks/ Official Institutions 37% Asia 38% Banks 25% EMEA 9% Asset Managers 13% Pension Funds/Insurance/Corporates 25%
The new issue carries a semi-annual coupon of 1.50% and will mature on September 25, 2018. It was priced with a spread of 54.7 basis points over the 1.00% UST due September 15, 2017. The pricing translates to a yield of 1.59%.
Bond Summary Terms*
Inter-American Development Bank
USD 500 million
September 25, 2014
Coupon payment dates:
Semi-annually on September and March 25, starting on March 25, 2015 up to and including the Maturity Date
September 25, 2018
London Stock Exchange
Fedwire, Euroclear, Clearstream
Joint lead managers:
Citi and Daiwa Capital Markets Europe Limited
About the Inter-American Development Bank
The IDB is a multilateral financial institution supporting Latin America and the Caribbean’s efforts to reduce poverty and inequality, and to bring about development in a sustainable, climate-friendly way. Established in 1959, it is the leading source of development financing for Latin America and the Caribbean, with a strong commitment to achieving measurable results.
*This press release is not an offer for sale of the securities of the Inter-American Development Bank. Any offering of IDB securities will be made only by means of a prospectus or other definitive offering document that contains important information about the securities, the offering and IDB. Offerings of securities will be made only in compliance with applicable laws.
- John Ferriter