Sustainability bond of the year - bank: Banco Continental del Paraguay

Rodrigo OrtizBreaking new ground by being the first Latin American financial institution sustainable bond brought to the international capital markets, Banco Continental's $300 million offering will finance projects across seven green and three social categories.

The offering was also Banco Continental's first return to the international market in eight years and first under its Sustainability Bond Framework, which it also published last year.

Banco Continental developed its Social and Environmental Management System (SEMS) in its credit process in 2009 to show its commitment to environment and society. SEMS consists of a series of procedures that identify, assess, mitigate and monitor possible impacts, and environmental and social risks associated with customers' activities, and the ability of the borrower to manage its impact.

Banco Continental uses it to in its credit origination programme and to review its loan portfolio. One aspect of SEMS is to use ContiMap, which provides satellite images of Paraguay to enable Banco Continental to map its clients' sites and ensure they're consistent with its sector guidelines in agriculture, cattle ranching or industry.

"At Continental, we continually seek to adapt to a world in constant evolution, incorporating high standards of social and environmental performance management. Our goal is to finance the transition to an environmentally and socially sustainable economy. We hope that the issuance of our Sustainable Bonds will inspire other similar companies to replicate these actions," said Rodrigo Ortiz Frutos, executive director of the bank.

The Environmental Finance Bond Awards judges were impressed with the nature of the bond. "It is important that the sustainable bonds help strengthen the internal systems of the issuer such as SEMS, ContiMap and database," said one.

Asset managers were the main investors of the bond taking over 93% of the allocation, while the international aspect of the account saw US accounts take most of the issue with 57%, followed by Europe with 40%.

Deal Highlights

Issuer: Banco Continental del Paraguay
Size: $300 million
Maturity: 10 December 2025
Coupon: 2.75%
Use of Proceeds: Financing or refinancing energy efficiency, green buildings, clean transportation, natural resources and land use, sustainable water and wastewater management, renewable energy, affordable basic infrastructure, access to essential services and employment generation
External Review: Sustainalytics
Lead managers: Santander and JPMorgan
Other highlights/notable features: First Latin American financial institution sustainable bond brought to the international capital markets