A few days after the Community of Madrid made its first incursion into social bonds with the issuance of 52 million destined for the purchase of medical equipment, today the region has closed a new operation in the sustainable debt market. The chosen formula has been a green bond this time. If it had not been so, between 30% and 40% of the investors who participated would have been left out.
In today’s community of Madrid has raised 700 million in a seven-year bond. The appetite for the role of the region has been felt strongly in demand, something that has allowed the amount to be raised from the 500 million with which the issue started to the 700 million finally achieved. The region’s debt interest has also been reflected in the price, which has dropped by nine basis points. Finally, the differential applied will be 19 basic points over the Spanish reference for that term compared to the initial 28 basic points. This is the purely green emission carried out by the region.
The interest generated by this issue has also been favored by the blackout period in which many banks and companies find themselves. The shortage of paper and the measures put in place by the ECB favor the appetite of investors in a context marked by instability stemming from the health crisis that the planet is suffering.
Sources close to the placement rate the issue as super successful and allege two reasons: the oversubscription of the books, since demand has reached 3,000 million, and that the operation has been closed without a new issue premium compared to the 10 basis points of issue premium recorded in the latest operations of this style carried out by other issuers. BBVA, ING, Crédit Agricole and Santander have acted as placement banks. The bonds will have a rating of Baa1, A-, BBB and AL according to the ratings of Moody’s, S&P, Fitch, DBRS, respectively.
With today’s, there are already five sustainable emissions carried out by the Community of Madrid. The last time the Community of Madrid went to the capital market to sell a due sustainable bond in February 2020. On that occasion, it managed to sell 1,250 million in a 10-year green bond. These securities accrue an annual coupon of 0.419% and the price at which the issue was closed was 14 basis points over the Spanish reference for that term, six basis points less with which the operation started.
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