Social Bond 2019: Social impact investing | CDP

Social Bond 2019

Social Bond aimed at financing school facilities and urban redevelopment initiatives

CDP successfully closed its second Social Bond, issued under the Debt Issuance Program (DIP), with demand strongly outstripping supply. The proceeds will be allocated for the financing of school buildings and urban redevelopment initiatives, with particular focus on the safety of buildings and local communities. This new transaction reaffirms CDP's commitment to territorial development in line with the new Business Plan.

The proceeds from the issue will be allocated to the construction, renovation, safety measures and earthquake-proofing for publicly-owned buildings dedicated to school education at all levels - from nursery school to university - and for urban redevelopment, with initiatives aimed at improving living standards in areas subject to degradation, social hardship and poor safety and security conditions.
In addition, this operation reaffirms CDP’s desire to expand the forms of funding dedicated to activities with a positive social and environmental impact, in line with the UN 2030 Agenda’s framework.

The Social bond issue is inspired by the SDGs 4 and 11 of the United Nations Sustainable Development Goals (UN SDGs): "Quality Education" and "Sustainable Cities and Communities": CDP for the first time has reoriented its operating model towards sustainable development themes, thanks to the 2019 - 2021 Business Plan.

The school building sector

The latest data made available by the MIUR in September 2018 regarding the state of health of Italian school buildings underline the need for an intervention in terms of safety, requalification and restructuring. For the patrimony of the local authorities, of over 50 thousand active buildings - of which over 60% built before 1975 - only 54% of the structures have a static test certificate, while over 50% don’t have a certificate for fire prevention.


Urban redevelopment

According to ISTAT data, the percentage of the Italian building stock in conditions of structural deterioration is significant: from 40% of the buildings in Naples and Reggio Calabria to 10% - 20% of those in cities such as Rome, Florence, Venice, Genoa, Bari, and Cagliari. Twenty-four million people live in areas with seismic risk, while another 6 million live in areas with a hydrogeological risk. In this scenario, the role of urban suburbs is central, with a high population density and the presence of degradation, marginality, and social unease.

The issue will therefore contribute to reducing this infrastructural gap, financing interventions to help school construction and urban redevelopment, with a view to sustainable development.

The initiative is part of CDP's “Green, Social and Sustainability Bond Framework” and is in line with the Social Bond Principles published by the International Capital Market Association (ICMA).

Tenor 7 years

Nominal amount € 750 mln

Annual coupon 2.125%