Swedish Investor Sweeps Up IADB’s First SEK EYE Bond

    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.

    Image by Nikolay Georgiev from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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