Insight & Analysis

Press release: Citi arranges CABEI’s ESG bonds in Asia

Published: Jan 2023

31st January 2023 – Citi announced today that it was appointed by Central American Bank for Economic Integration (CABEI; rated Aa3 by Moody’s and AA by S&P; both ratings without registration) as the sole arranger of a 10-year JPY7billion Blue Bond and a 10-year USD130million Social Bond issued to Japanese and Taiwanese institutional investors.

The settlement date is January 31, 2023. Citigroup Global Markets Japan Inc. and Citigroup Global Markets Taiwan Securities Co., Ltd. are the distributors (with Citigroup Global Markets Limited as the underwriter of this transaction). Japanese and Taiwanese institutional investors with a strong appetite for ESG bond investments have collaborated to contribute towards CABEI’s Environmental and Social projects. CABEI established its “Green Bond Framework” in 2019 followed by a “Social Bond Framework” in 2020 and a “Green and Blue Bond Framework” in 2022. All frameworks are aligned to the International Capital Market Association (ICMA)’s Green Bond Principles and Social Bond Principles.

The funds raised by CABEI will be used to finance projects within their eligible categories. These include Water Resource Protection, Sustainable Water Management, Renewable Energy, Blue Economy, and Nature Protection under the Blue Bond framework. Within the Social Bond framework, Access to Essential Services, Employment Generation, Socioeconomic Empowerment, Affordable Basic Infrastructure, Food Security and Sustainable Food Systems will be prioritized.

Multiple institutional investors from Japan and Taiwan invested in CABEI’s ESG bonds to demonstrate their support for sustainable growth in Central America. This marks the first successful joint effort between Citigroup Global Markets Japan and Citigroup Global Markets Taiwan Securities to distribute an ESG bond private placement club deal for investors from these markets.

Keita Matsumoto, Head of Financial Institutions Sales and Solutions, Citigroup Global Markets Japan, said “Citi Japan is pleased to have had the opportunity to work with CABEI and leading investors from Japan on a Blue Bond given the increasing importance of a regional blue economy strategy. Citi Japan is a pioneer in the field of ESG bond private placement and has arranged several Blue Bonds since 2021. We will continue to contribute to the blue economy around the world.”

Esther Feng, Head of Markets, Citibank Taiwan Limited, noted that “ESG sustainability has become a global phenomenon. Citi noticed that while companies strive to make profits, their interest in ESG financial products has increased and they are willing to make impact investments globally. The collaboration between Citi’s teams not only brings together investors from Taiwan and Japan to participate in infrastructure projects in Central America but also contributes to the issues of climate change and sustainable development. Citi Taiwan has been supporting CABEI in issuing bonds in TW dollars since 1997, and the two parties have established a close working relationship.”

Citi has been committed to supporting sustainability through its business for more than two decades. Since joining the United Nations Environment Programme Finance Initiative in 1997, Citi has participated in various sustainability-related initiatives within and outside the financial industry.

Overview

Issuer Central American Bank for Economic Integration (CABEI)
Rating Aa3 by Moody’s and AA by S&P; both ratings without registration
Issue amount 10-year JPY7billion Blue Bond
Payment date January 31, 2023
Redemption date January 31, 2033
Issue price 100%
Interest rate 1.265%
Distributor Citigroup Global Markets Japan Inc.
(Underwriter: Citigroup Global Markets Limited)
Issuer Central American Bank for Economic Integration (CABEI)
Rating Aa3 by Moody’s and AA by S&P; both ratings without registration
Issue amount 10-year USD130million Social Bond
Payment date January 31, 2023
Redemption date January 31, 2033
Issue price 100%
Interest rate 4.900%
Distributor Citigroup Global Markets Taiwan Securities Co., Ltd.
(Underwriter: Citigroup Global Markets Limited)

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