Stockholm (NordSIP) – The Inter-American Development Bank (IADB), issued a new SEK1.1 billion 5-year fixed-rate social bond. The security was the first SEK transaction conducted under the IADB’s Education, Youth, and Employment (“EYE”) Bond program. Skandia purchased the vast majority of the bonds.
IADB’s EYE Bond Programme
Projects under the EYE program are designed to promote sustainable growth, poverty reduction, and social equity in Latin America and the Caribbean. The Bank’s first issuance under the EYE Bond program came in 2014.
The IDB has a “life cycle” approach to building human capital from early childhood care and education, through formal primary and secondary education. Additionally, the organization provides programs that facilitate labor market placement by improving the transition from school to work through vocational training. Moreover, the organization assists to increase productivity and improve social inclusion of young people throughout key intervention stages.
“We are pleased to issue our first ever Swedish Krona denominated EYE bond. This issuance aligned us with investors who share our vision of improving lives in Latin America and the Caribbean. We are eager to continue expanding EYE bond issuances and investor partnerships are instrumental to that goal,” said Laura Fan, Head of Funding at the IDB.
Skandia Takes Over
The bond pays a 0.25% annual coupon and was priced at a 99.8 discount. Nordea was the sole lead manager on this transaction. “Nordea is delighted to have facilitated IADB’s inaugural EYE Bond in Swedish Krona, which is also IADB’s largest SEK deal to date,” Kamal Grossard-Amin, Managing Director and Head of SSA DCM at Nordea Bank, comments. “The work towards improving lives and eliminating poverty and social injustice around the world is a cause that we are immensely proud to continuously contribute to.”
The deal was fully placed with a select few dedicated social bond investors who had expressed strong interest in the ‘EYE’ bond program in SEK-currency format, including Skandia and BlackRock. Skandia, in particular claims to have purchased SEK 1 billion, or close to 91%, of the IADB EYE bond.
“The investment is in line with Skandia’s ambition to be a sustainability role model. This social bond is extra interesting as it targets funds to well-defined criteria that can be evaluated,” says Lars-Göran Orrevall, Chief Investment Officer at Skandia.
“We believe that environmental and social issues are some of the most important issues facing our global society and it is a great opportunity to be able to partner with both IDB and Nordea on this social bond,” Lee Heathman, Portfolio Manager at BlackRock Japan, adds.