After four years without issuing in international markets, this new issue obtained an oversubscription of 4.3 times, with a historical record of spread against the sovereign.
COFIDE, the Development Bank of Peru, returned to the international capital market with the successful issuance of a socially labeled bond for US$300 million.
The demand obtained reached almost US$ 1,300 million (4.3 times the demand), allowing the spread to be adjusted by 40 basis points, to close at a record spread level of 65 basis points over the comparable bond issued by Peru, the most low in the history of COFIDE (historical range between 95 basis points and 130 basis points).
The issue, which has a term of 5 years and closed with a coupon rate of 5.95%, had the participation of top-level investors, including investment fund managers, international banks, and institutional investors.
Likewise, 48% of the amount demanded came from investors from North America, 35% from Europe, 11% from Latin America and 6% from Asia, which is a notable fact given that we are in the midst of a complex international situation.
This is the first 144A/Reg.S social bond from a Peruvian financial institution. Although the resources raised will be used to repurchase the COFIDE subordinated bond (with a call in July 2024), there is a commitment to allocate a similar amount (US$ 300 million) to finance and refinance eligible social projects in accordance with the Framework. COFIDE Thematic Financing.
The eligible category that will support the destination of the resources of the international social bond is “Support for MSMEs for the use of financial services”, and the eligibility criterion “Financing lines or other financial support for MSMEs”.
“We are very pleased with this good result that reflects the efforts of the COFIDE team, in a work that included roadshows carried out virtually and in person in Europe and the United States. The demand evidenced by the bond demonstrates the level of confidence in the Peruvian market and in particular in COFIDE, for the role we have in promoting sustainable development, especially of MSMEs with social impact,” indicated Jorge Velarde, president of the Board of Directors of COFIDE.
The Thematic Bond Framework was presented through a non-deal roadshow with face-to-face meetings in London and Luxembourg, and once the bond was announced, a deal roadshow was held in New York, spaces in which more than 40 investors met. The structuring banks and advisors of the transaction were: JP Morgan and Santander.
With this issue, COFIDE now has more than US$ 2.7 billion of securities issued in the international capital market.
At the local level, it also acts as a recurring issuer in thematic issues with six bonds of this type: 4 social, 1 sustainable and 1 green.
