ICO launches its second green bond to finance Spanish companies' projects that promote ecological transition

26 October 2020

The 500 million euro issue has seen demand of over 3 billion euros and has been placed at the lowest spread obtained by ICO in its issues

89% of the issue has been acquired by foreign investors, which highlights the international backing behind ICO's work to support projects that promote ecological transition

The transaction closed today is ICO's ninth sustainable bond issue (seven social and two green), which strengthens ICO's position as a European leader in this market with over 4,550 million euros issued.

With the first green bond issued in 2019, over 4 billion euros have been mobilised in financing projects that have generated an estimated saving of 315 tonnes of CO2 emissions

This operation is part of the objective of promoting ecological transition, under a public-private collaboration scheme, a key element of the Recovery, Transformation and Resilience Plan

Instituto de Crédito Oficial (ICO) has launched its second green bond issue amounting to 500 million euros. The funds will be used to finance projects carried out by Spanish companies that contribute to promote ecological transition, one of the pillars of the Recovery, Transformation and Resilience Plan for the Spanish economy within the framework of the Next Generation EU programme.

With this objective in mind, in accordance with the provisions of ICO's green bond framework  the funds raised with this operation will support Spanish companies' projects in the field of renewable energies, energy efficiency, clean transport, pollution prevention and control and sustainable management of natural resources. These projects will be financed under the model of public-private collaboration and will contribute to job creation and promote sustainable economic growth.

The issue closed today has been very well received, with a demand of over 3 billion euros from over 130 investors. This has made it possible to reduce the spread initially set at 12 basis points over the Treasury benchmark for the same maturity to 7 basis points, the lowest spread obtained by ICO in its benchmark deals.

The deal, led by BBVA, Crédit Agricole CIB, HSBC and ING, has a maturity of five and a half years, with a return for the investor of -0.201%.

89% of the bonds   have been distributed among foreign accounts, which shows the confidence of international investors in ICO's work to execute projects that contribute to promoting the ecological recovery and transition. It also shows the interest in these type of issues. Likewise, it should be noted that 62% of the bonds have been placed among investors accredited as socially responsible.

Regarding the distribution by type of investor, it is worth noting the demand registered by fund managers, who acquired 44% of the total volume, followed by banks with 32%, central banks and official institutions with 20% and insurers and pension funds with 4%.

ICO, a reference in European sustainable bonds

ICO has carried out nine sustainable bond issues (7 social and 2 green), consolidating its position as one of the references in this market at the European level, with a total of 4,550 million euros issued.

The funds will be used to finance projects that generate a positive social or environmental impact. With this issue, ICO reinforces its position in a specialised market centred on promoting a growth model aligned with the European Green Deal.

ICO's green bond issues are aligned with the Green Bond Principles of the ICMA (International Capital Markets Association) and has the validation of Sustainalytics, one of the leading companies in the analysis of corporate social responsibility.

In accordance with its commitment to investors, the impact report of the first green bond issued by ICO in 2019 was published in April 2020. ICO has channelled the funds raised with this issue, helping to mobilise over 4 billion euros in financing projects that have generated an estimated saving of 315 tonnes of CO2 emissions.

For the ICO Group, the contribution to a model of recovery and sustainable growth is a priority, in line with the guidelines set out in the Recovery, Transformation and Resilience Plan of the Spanish economy that reflects in turn the priorities established in the European Next Generation EU programme and the 2021-2027 Multiannual Financial Framework.