2. Background of the Report
a) Sustainable Bond Framework
This Report has been made in accordance with the provisions included in the Sustainable Bond Framework[1], This document establishes the obligations that the government fulfils as a Sustainable issuer.
The green expenses defined as eligible in the Framework establishes the eligible sectors for the inclusion of projects in the bonds. There are six green sectors:
- Clean Transportation
- Energy Efficency
- Renewable Energies
- Living Natural Resources, Land Use and Marine Protected Areas
- Efficient and climate resilient water management
- Green Buildings.
The social sectors are:
- Support for the elderly or people with special needs in vulnerable situation
- Support for low-income families
- Support for human rights victims
- Support for the community through job creation
- Access to affordable housing
- Access to education
- Food security
- Access to Essential Health Services
- Social programs designed to prevent and/or alleviate unemployment stemming from the socioeconomic crisis, even through the potential effect of financing of the SMEs and micro finances.
b) Historical issuances and scope of this report
As of December 31, 2021 the Ministry of Finance had issued approximately US$17.9 billion in social Bonds, US$7.6 billion in Green Bonds and US$1.5 billion in sustainable Bonds. This corresponds to a total of US$27.1 billion in ESG bonds.
i. Green Bonds
TABLE 1
Green Bond Issuances.
|
2019 Issuances |
2020 Issuances |
|||||
|
Item |
EUR-2031 |
USD-2050 |
EUR-2031 (R) |
EUR-2040 |
USD-2032 |
USD-2050 (R) |
|
Amount (USD million) |
€ 861 |
US$ 1,418 |
€ 694 |
€ 1,269 |
US$ 750 |
US$ 900 |
|
Pricing day (T) |
January 25, 2019 |
January 17, 2019 |
January 23, 2020 |
January 23, 2020 |
January 22, 2020 |
January 22, 2020 |
|
Settlement Date |
July 2, 2021 (T+6) |
January 25, 2019 (T+6) |
January 29,-2020 (T+6) |
January 29, 2020 (T+6) |
January 27, 2021 (T+3) |
January 27, 2021 (T+3) |
|
Maturity |
July 2, 2031 |
January 25, 2050 |
July 2, 2031 |
January 29, 2040 |
January 27, 2032 |
January 25, -2050 |
|
Coupon/Yield |
0.830%/0.830% |
3.500%/3.530% |
0.830%/0.695% |
1.250%/1.299% |
2.550%/2.571% |
3.500%/3.275% |
|
Price |
100.000% |
99.439% |
101.477% |
99.14% |
99.784% |
104.77%% |
|
Spread |
MS+50 |
T+95 |
MS+50 |
MS+80 |
T+80 |
T+105 |
|
2021 Issuances |
||
|
Item |
EUR-2031 (R) |
USD-2032 (R) |
|
Amount (USD million) |
€ 400 |
US$ 750 |
|
Pricing day (T) |
January 19, 2021 |
January 19, 2021 |
|
Settlement Date |
January 22, 2021 (T+3) |
January 22, 2021 (T+3) |
|
Maturity |
July 2, 2031 |
January 27, 2032 |
|
Coupon/Yield |
0.830%/0.399% |
2.550%/1.962% |
|
Price |
104.399% |
105.682% |
|
Spread |
MS+60 |
T+87 |
ii. Social Bonds
TABLE 2
Social Bonds issuances.
|
2020 Issuances |
||
|
Item |
CLP-2028 |
CLP-2033 |
|
Amount (USD million) |
$1,040,000 |
$560,000 |
|
Pricing day (T) |
November 19, 2020 |
November 19, 2020 |
|
Settlement Date |
November 23, 2020 (T+2) |
November 23, 2020 (T+2) |
|
Maturity |
October 1, 2033 |
October 1, 2033 |
|
Coupon/Yield |
2.30%/2.50% |
2.8%/3.4% |
|
Price |
98.680% |
94.080% |
|
2021 Issuances |
||||||
|
Item |
CLP-2024 |
CLP-2028 |
EUR-2027 |
EUR-2029 |
EUR-2036 |
EUR-2051 |
|
Amount (USD million) |
$1,061,000 |
$1,500,000 |
€ 1,000 |
€ 918 |
€ 750 |
€ 1,250 |
|
Pricing day (T) |
December 9, 2021 |
June 30, 2021 |
July 21, 2021 |
September 14, 2021 |
July 21, 2021 |
January 19, 2021 |
|
Settlement Date |
December 13, 2021 (T+2) |
July 2, 2021 (T+2) |
July 26, 2021 (T+3) |
September 21, 2021 (T+5) |
July 26, 2021 (T+3) |
January 22, 2021 (T+3) |
|
Maturity |
June 1, 2024 |
October 1, 2028 |
July 26, 2027 |
January 21, 2029 |
July 26, 2036 |
January 22, 2051 |
|
Coupon/Yield |
5.80%/5.70% |
5.00%/4.60% |
0.100%/0.296% |
0.555%/0.555% |
1.300%/1.310% |
1.250%/1.298% |
|
Price |
100.400% |
102.700% |
98.932% |
100.000% |
99.865% |
98.814% |
|
Spread |
– |
– |
MS+60 |
MS+70 |
MS+110 |
MS+125 |
|
2021 Issuances |
||||||
|
Ítem |
USD-2033 |
USD-2041 |
USD-2041 (R) |
USD-2061 |
USD-2061 (R) |
USD-2071 |
|
Amount (USD million) |
US$ 2,250 |
US$ 1,700 |
US$ 1,000 |
US$ 1,500 |
US$ 500 |
US$ 1,000 |
|
Pricing day (T) |
July 22, 2021 |
May 4, 2021 |
July 22, 2021 |
January 19, 2021 |
July 22, 2021 |
September 14, 2021 |
|
Settlement Date |
July 27, 2021 (T+3) |
May 7, 2021 (T+3) |
July 27, 2021 (T+3) |
January 22, 2021 (T+3) |
July 27, 2021 (T+3) |
September 21, 2021 (T+5) |
|
Maturity |
July 27, 2033 |
May 07, 2041 |
May 7, 2041 |
January 22, 2061 |
January 22, 2061 |
September 21, 2071 |
|
Coupon/Yield |
2.550%/2.577% |
3.100%/3.302% |
3.100%/3.139% |
3.100%/3.116% |
3.100%/3.329% |
3.250%/3.420% |
|
Price |
99.723% |
97.060% |
99.426% |
99.636% |
94.989% |
95.941% |
|
Spread |
T+130 |
T+115 |
T+130 |
T+127 |
T+140 |
T+158 |
iii. Sustainable Bonds
TABLE 3
Sustainable Bonds Issuances.
|
|
2021 Issuances |
|
Item |
USD-2053 |
|
Amount (USD million) |
US$ 1,500 |
|
Pricing day (T) |
March 30, 2021 |
|
Settlement Date |
April 15, 2021 (T+10) |
|
Maturity |
April 15, 2053 |
|
Coupon/Yield |
3.500%/3.500% |
|
Price |
100.00% |
|
Spread |
T+111.9 |
c) Awards and Recognitions
The Ministry of Finance, in particular its Public Debt Office, has received various awards and recognitions for specific transactions, its strategy in public debt management and the innovation in the development of financial instruments, in particular for the issuance of Green, Social and Sustainable Bonds. The following is a list of some awards and recognitions related to these type of instruments:
- Global Capitals Bond Awards 2022 - Overall Most Impressive Emerging Market Issuer.
- Global Capitals Bond Awards 2022 - Most Impressive Latin America Green/Social Responsible Investing Debt Issuer.
- Environmental Finance Bond Award 2022: Social bond of the year – Sovereign.
- Sovereign Issuer of the Year/Local Currency Deal of the Year, LatinFinance Deals of the Year Awards 2021.
- Sovereign Funding Team of the Year, Bonds & Loans Latin America & Caribbean Awards 2021.
- Most Impressive Latin American Green /SRI Debt Issuer, GlobalCapital Bond Awards 2021.
- Largest Emerging Market Certified Climate Bond in 2020, Climate Bonds Initiative Awards 2021.
- Green Finance 2019, The Banker.
- Green Bond of the Year Sovereign, Environmental Finance Bond Award 2019.
- Financing, Netexplo Smart Cities Accelerator UNESCO 2019.
- Sovereign Issuer of the Year, LatinFinance Awards 2019.
- Best Public Debt Office/Sovereign Debt Management Office in Latin America, GlobalMarkets Awards 2019.
- Green Bond of the Year for Latin America, GlobalCapital Sustainable and Responsible Capital Market Awards 2019.
- Recognition for innovation in sustainable finance 2019, Spanish Observatory of Sustainable Financing.