The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced last week a new CAD 500 million 7-year Global Sustainable Development Bond raising awareness for the United Nations’ Sustainable Development Goal #3: Good Health and Well-being.

The transaction pays a semi-annual coupon of 0.875% and matures on 27 August 2027. It priced with a spread of 50.7 basis points over the 1.00% CAN due 1 June 2027, which represents a yield of 0.965% s.a.

This transaction marks IDB’s first CAD fixed-rate benchmark of 2020. The new line was the first CAD 7-year Sustainable Development Bond ever and first in the tenor from a non-Canadian domiciled SSA borrower since 2014. Additionally, the transaction stands as the IDB’s longest-dated CAD new issue since 2007.

Laura Fan

“Strong investor demand for Environmental, Social, and Governance (ESG) investments coupled with a supportive backdrop for issuance gave us the confidence to go ahead. Indeed, we saw a record number of investors involved in an IDB Canadian dollar-denominated bond. It is the IDB’s ninth transaction this year highlighting SDG#3 and the first to specifically target the domestic Canadian market. Now more than ever, the Latin America and Caribbean region needs support in mitigating the impact of the ongoing pandemic.” said Laura Fan, Head of Funding, IDB.

Investor Distribution:

By GeographyBy Investor Type
Canada 53%Banks 46%
Asia & Pacific 27%Asset Managers 32%
EMEA 16%Central Banks / Official Institutions 13%
USA 4%Pension Funds / Insurance / Corp 9%

Bond Summary Terms:

Issuer:Inter-American Development Bank (Ticker IADB)
Issuer rating:Aaa / AAA (Moody’s / S&P)
Amount:CAD 500 million
Settlement date: 27 August 2020 (T+10)
Coupon payment dates:
27 February and 27 August (semi-annual)
Maturity date:27 August 2027
Issue price:99.392%
Issue yield:0.965% s.a.
Reoffer spread:Mid Swaps +5 / CAN +50.7
Listing:London Stock Exchange
Clearing systems:CDS, Clearstream, Euroclear
Joint lead managers:BMO Capital Markets / BofA Securities / Scotiabank
Co-lead managers:N/A
CUSIP / ISIN:458182EC2 / CA458182EC20

Sean Hayes, Managing Director, Head of US Syndicate, BMO Capital Markets, said:

“A statement transaction by the IDB in Canadian Dollars, in support of the Bank’s development mission, with a focus on improving health. Innovation was on showcase. This marks the first ever international SSA to issue a 7-year CAD Sustainable Development Bond, including the first in the maturity in over 5 years, which suited Canadian and global ESG focused investors well.”

Adrien de Naurois, SSA Syndicate, BofA Securities, said:

“A superb return by the IDB to the Canadian dollar market, once again demonstrating the broad investor appeal of their Sustainable Development Bond Framework. The transaction highlighting Good Health and Well Being is particularly timely given the current global backdrop and the ability to upsize in this less traditional maturity is a testament to IDB’s consistent investor relations programme. Congratulations to the team.”

Cesare Roselli, Global Head of SSA (Sovereign, Supranational, and Agency) Origination, Scotiabank, said:

“Scotiabank is proud to support the IDB in its second CAD Sustainability Bond targeting UN Sustainable Development Goal #3: Good Health and Well-being. We are committed to assisting clients by mobilizing capital in Latin America while playing a driving role in the ongoing expansion of the Canadian dollar issuance market. The IDB is a market leader in sustainable financing and this 7-year bond issue resulted in strong involvement of the domestic ESG investment community in Canada.”