ICO issues its sixth green bond for the amount of EUR 500 million to finance projects with a positive environmental impact

20 marzo 2024

  • 75% of the operation has been placed with international accounts, reflecting investor confidence in ICO’s role as a sustainable bond issuer
  • This operations increases ICO's total issuance in green bonds to EUR 3 billion, which has financed projects by Spanish companies aimed at reducing CO2 emissions by over 1,164,000 tonnes annually

Instituto de Crédito Oficial (ICO) has launched its sixth green bond, for the amount of EUR 500 million with a term of seven years. With this operation, ICO increases its total raised volume through green bond transactions to EUR 3 billion and strengthens its position as a benchmark issuer in the sustainable debt markets. 

The resources raised with this bond will be used to finance projects that enhance the ecological transition and the development of sustainable finance, in line with the objectives of the National Recovery, Transformation and Resilience Plan.

Thanks to the issuance of green bonds to date, ICO has promoted 44 renewable energy and clean transport projects by Spanish companies, which have mobilised an investment of approximately EUR 18.9 billion and will prevent the emission of more than 1,164,000 tons of CO2 per year.

High demand from international investors

The transaction has been extremely well received by investors, with demand reaching almost EUR 3.9 billion. In the end, the order book closed with demand exceeding EUR 3 billion, more than six times the volume issued. 

The high demand generated has allowed the spread over the Treasury benchmark at the same maturity, which was initially set at 17 basis points, to be adjusted to a spread of 11 basis points.

The quality of the order book is reflected in the participation of international accounts, among which 75% of the issue has been distributed. Likewise, it should be noted that 47% of the issue has been placed among investors categorised as ESG. 

This distribution shows investor confidence in ICO’s role, both as an issuer of sustainable bonds and in its activity in financing projects that boost the green transition.

The operation was led by BBVA, BNP Paribas, Crédit Agricole (CA-CIB), HSBC and Santander and pays a coupon of 3.05%.

In terms of geographic distribution, noteworthy participation comes from investments originating in Germany and Austria, accounting for 24% of the issue. Also noteworthy is the presence of Asian accounts, which accounted for 10% of the volume issued.

In terms of distribution by type of investor, it is worth noting the role of fund managers, which have acquired 37% of the total, followed by banks (30%), and central banks and official institutions (23%). Insurers and pension funds have bought 10%.

ICO: reference issuer in sustainable bonds

ICO is a benchmark issuer in the European sustainable bond market, with 16 issues (10 social and 6 green) for the amount of EUR 8,052 million that are channelled towards projects of Spanish companies to promote sustainable growth.  

In addition, ICO is a promoter of the International Capital Market Association (ICMA ) social bond benchmarks and is a member of the Advisory Council of the GBP and SBP Executive Committee.