IDB issues more sustainable bonds in Aussie dollars

IDB issues more sustainable bonds in Aussie dollars

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Latin America

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The Inter-American Development Bank (IDB) said Wednesday that it sold AUD140 million ($97.6 million) worth of sustainable development bonds, or SDBs, in a private placement with Japanese life insurance company Nippon Life.

With Crédit Agricole as the lead manager, the Washington DC-based development bank placed the new 10-year notes with a coupon of 1.3%, level with a SDB sale for AUD350 million in May, the IDB said in a press release.

"We have seen increased demand for the IDB's sustainable development bonds," Laura Fan, head of funding at the IDB, told LatinFinance in an email. "As of today, we have issued around $7 billion ($985 million in 2019). The increased demand is due in part to investor interest in supporting the IDB's lending related to COVID-19."

The development bank has increased its borrowing program to $25.6 billion from $20 billion to cover an increase in lending to counteract the economic impact of the COVID-19 pandemic in Latin America and the Caribbean, Fan said.

The IDB said in the press release that it will use the money from the latest bond sale to fund projects "that promote neighborhood improvements, provide access to safe and inclusive public spaces for women, children, and persons with disabilities, and construction of low-carbon housing for low income people."

The IDB completed its first SDB deal for $2 billion in March this year, followed by $4.25 billion in SDBs and IDR55 billion ($3.76 million) in SDBs in Indonesian rupiahs in April.