Sustainable bonds

Regulation & Policy    Jun 25, 2019 2:54 PM

Colombia will issue its first sustainable bonds through a public auction. Here are the details.

The difference between these and the green or social bonds – previously issued in Colombia – is that sustainable bonds are a combination of both. That is, they must have a double positive impact, socially and environmentally speaking.

The auction will have a value of CoP$400B, El Tiempo said, adding that the resources will be used by Colombia’s Territorial Development Finance (Findeter), to finance social and environmental projects.

“Sustainable bonds are those in which the Issuer (in this case, Findeter) is committed to using resources in projects that reduce carbon emissions and have a positive social impact,” explained Ramiro López-Ghio, Chief of Operations at the Inter-American Development Bank (IDB) in Colombia.

Findeter assured that both individuals and companies will be able to invest in the bonds, which are rated AAA by Standard & Poor’s.

“These bonds are important for investors, because they can invest to help fight climate change and different social problems, which helps them develop ‘greener portfolios’ that not only require financial analysis, but also begin to integrate ESG criteria (Environmental, Social and Governance) in their investment decisions,” Barrios added.

The entity wants to continue strengthening its relationship and image in the public securities market, by making the largest issuance in terms of sustainability in Latin America, where investors, in addition to obtaining profitability, get to make a responsible investment that contributes to the sustainability of the country.

Bottom-line: Excellent news for Colombia and its work to fulfill its international environmental commitments.

The initiative makes Colombia a pioneer in the issuance of sustainable bonds in in Latin America, after Mexico and Chile.

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