The Mexican state-owned development bank, Nacional Financiera S.N.C (Nafin), issued its inaugural green bond of $500m. The bond is the first green bond in Mexico, and also the first green bond in Latin America to receive internationally recognised Climate Bonds Certification by the Climate Bonds Standard Board! Rated as A3 (Moody’s) and BBB+ (Fitch), the bond offers a coupon of 3.41% with the maturity of 5 years. The spread was of 190 bps above the five year US Treasury bond and 56 bps above five year USD Mexican Government benchmark (UMS). Bank of America Merrill Lynch, Credit Agricole CIB, and Daiwa Capital Markets America are the joint lead managers for this issuance. Sustainalytics provided the second review for this bond, which is available here.
This bond receives overwhelming welcome from the investors. It was oversubscribed by 5 times!
The proceeds will be used to finance 9 wind farms located in Oaxaca, Nuevo Leon and Baja California. As certified by the Climate Bonds Standard Board, this bond is backed by these wind projects certified by the Climate Bonds Initiative Wind Standards.
Pedro Guerra, Treasurer at Nacional Financiera S.N.C. said:
“We are glad to announce the first Green Bond Issuance in Mexico and the third in Latin America. Financing green projects is not something new for us and this green bond shows Nafin’s commitment to sustainable development. With this transaction, Nafin positions itself as a strategic development bank to meet the environmental goals of the Federal Government.”
This new issuance shows Nafin’s commitment to invest in green projects and, through Climate Bonds Certification, will provide confidence to investors, assuring them the best possible way in the use of proceeds.
A Mexico-based bond issuance with Climate Bonds Standard Board certification sends a positive signal throughout Latin America that green bonds can be a valuable source of development capital for a range of low carbon projects.