The Brazilian Development Bank (BNDES) completed the raising of US$ 1 billion in green bonds this Tuesday (May 9) on the international market. The bonds are due in 2024. This is the first time that a Brazilian bank has made an issue of green bonds in the international market. The demand has reached US$ 5 billion in orders with the participation of more than 370 investors in the process of pricing the bonds. The last time the Bank made an issue abroad was in 2014.
The bonds have features similar to conventional ones; however, the funds obtained will be destined for financing environmentally sustainable projects, certified by a company specialized in the environmental area. In the case of BNDES, they are aimed at new or already existing wind or solar generation projects in the portfolio of the Bank.
The issue valorizes the Bank’s support to initiatives of renewable energy generation: between 2003 and 2016, in the wind power sector alone, the Bank approved 87 credit operations totaling R$ 28.5 billion in credit, increasing the installed capacity by about 10.7 GW. The release of this bond is added to the various initiatives of BNDES to play its role as inducer of sustainable development.
Remuneration – The operation resulted in a rate of return to the investor of 4.80% per annum, which represents a premium of 269.3 basis points on the rates of the bonds from the Treasury of the United States of America and about 60 basis points on the external bonds from the Federative Republic of Brazil.
The bonds will be listed on the Luxembourg Green Exchange. The operation, which was coordinated by the Bank of America Merrill Lynch, Crédit Agricole and JP Morgan, has enabled a large breaking up of bonds for buyers of several investment profiles and different geographic regions (United States of America, Europe, Asia and Latin America), diversifying the base of BNDES investors when accessing a range of institutions focused on “green finance.”
The success of this offer of green bonds consolidates the international presence of BNDES and provides a number of benefits, such as to strengthen the priority the Bank gives to social and environmental sustainability; to promote the dissemination of best practices of social and environmental management; to encourage the access of other Brazilian issuers to the market of green bonds and to build a new reference point in its structure for international interest rates.