DistantNews
Support us
Barranquilla issues $350 million in sustainable bonds on international market
🇵🇾 Paraguay /Economy & Trade

Barranquilla issues $350 million in sustainable bonds on international market

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Barranquilla became the first Colombian city to issue sustainable bonds on the international market, raising $350 million.
  • The issuance aims to refinance short-term, high-cost debt and fund social and environmental projects, including ecosystem protection and renewable energy initiatives.
  • The bonds, rated Baa3 and BB by Moody's and Fitch respectively, were oversubscribed, attracting demand exceeding $1.2 billion from institutional investors globally.

Barranquilla has made history as the first city in Colombia to successfully issue sustainable bonds on the international capital markets, securing $350 million. This significant financial operation aims to replace existing short-term, high-cost debt with new, more favorable five-year bonds.

The operation will allow replacing short-term, high-cost debt with new securities with better financial conditions and a five-year term.

— Alcaldía de la ciudad caribeñaInformation provided by the Mayor's office regarding the purpose of the bond issuance.

The issuance, conducted under U.S. legislation (Rule 144A and Regulation S), attracted substantial interest from institutional investors. Demand surpassed $1.2 billion, more than three times the amount offered, with participation from approximately 67 investors across the United States, Europe, and the Middle East. The fixed annual interest rate was set at 7.35%.

Funds generated will support a range of crucial social and environmental projects. These include the protection and restoration of the Mallorquín swamp, a vital ecosystem supporting around 155 bird species, as well as initiatives in offshore wind energy, renewable energy adoption, efficient water management, and the modernization of public markets.

The financing will also cover initiatives in offshore wind energy, renewable energies, efficient water management, recovery of water bodies, housing improvement, and modernization of public markets.

— Alcaldía de la ciudad caribeñaDetails on the specific projects to be funded by the bond proceeds.

Financial institutions Itaú BBA, J.P. Morgan, and Scotiabank acted as joint bookrunners. The bonds received strong ratings, with Moody's and Fitch assigning expected ratings of Baa3 and BB, respectively. Furthermore, Barranquilla's Sustainable Bond Framework earned a SQS1 (Excellent) rating from Moody's, the highest for such instruments. City officials actively engaged with over 60 potential international investors to showcase the city's financial health, economic and social progress, and its portfolio of ESG-aligned projects.

The Barranquilla Sustainable Bond Framework received an SQS1 (Excellent) rating from Moody's, the highest awarded by that firm for this type of instrument.

— Moody'sInformation about the credit rating and assessment of the bond framework.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog