First ever sustainability-linked sovereign bond supports the Republic of Chile's climate ambitions
Societe Generale was active bookrunner and joint sustainability structuring advisor of first-ever sustainability linked sovereign bond.
Societe Generale acted as an Active Bookrunner and Joint Sustainability Structuring advisor for a new USD 2bn 20-year sustainability-linked bond transaction for the Republic of Chile. The transaction references the Republic of Chile Sustainability-Linked Bond Framework published on February 23rd, 2022.
This transaction marks the first sustainability-linked offering by the Republic of Chile, as well as the first sustainability-linked bond ever issued by a sovereign globally.
The transaction was very well received by the investor community, garnering a ~$6bn final orderbook (3x oversubscription) at a final landing level of T+200bps.
The new bonds are the first debt offering under the Republic of Chile’s new SLB Framework and follows Chile’s issuance of green bonds in 2019 and sustainable bonds in 2020, both firsts for Latin American sovereign issuers, and its issuance of landmark social bonds in 2021. Having issued in sustainable format in EUR, USD and CLP over the past three years, Chile is already a reference signature in this market.
Through the new SLB Framework, Chile’s Ministry of Finance is further expanding its commitment to sustainable development and, through the issuance of SLBs, Chile intends to leverage ambitious timelines to achieve strong sustainable outcomes that are relevant, core and material to Chile and its people, as well as to create a benchmark for other sovereigns.
The Republic of Chile’s sustainability-linked bonds were issued with a coupon rate tied to the achievement of Sustainability Performance Targets, measured through two KPIs: (i) Absolute Greenhouse Gas Emissions (MtCO2e), and (ii) Share of Non-Conventional Renewable Energy Generation in the National Electric System. Chile’s SLB Framework and bond issuance are grounded in Chile’s commitment to the Paris Agreement. The SLB Framework received a favorable Second Party Opinion.
Societe Generale has acted as the structuring advisor for highly visible inaugural green, social and sustainability transactions for key clients in all asset classes, across the globe, highlighting the bank’s strong advisory capabilities in the Sustainable and Positive Impact finance field.