CDP has closed successfully its inaugural € 500 million Social Bond First Social Bond in Italy - Demand strongly outstripped supply
Press release

CDP has closed successfully its inaugural € 500 million Social Bond First Social Bond in Italy - Demand strongly outstripped supply

  • The first "Social Bond" launched in the international capital market by an Italian issuer, dedicated to support SMEs located in economically deprived areas or hit by natural disasters 
  • The transaction followed a pan-European roadshow touching Amsterdam, London, Paris, and Milan, organized to introduce CDP’s newly-established Social Bond Framework and provide a credit update 

  • The issue, for institutional investors, has a nominal value of € 500 million, at fixed rate, senior unsecured, with a tenor of 5 years (maturity date November 2022), an annual coupon of 0.75% and a re-offer price of 99.839%

  • The issue is consistent with the CDP Social Bond Framework, in line with the Social Bond Principles released by the International Capital Market Association in June 2017, and inspired by the UN Sustainable Development Goals

  • On the transaction, CDP obtained a Second Party Opinion provided by Vigeo Eiris 

  • The transaction is part of a broader strategy of CDP’s approach to sustainability, diversification of investor base and stabilisation of funding sources 

  • The success of the transaction, with a significant presence of foreign and socially responsible investors (SRI) in the order’s book, shows continued market confidence in CDP’s initiatives, including its ESG commitment

 

Rome, November 14, 2017 h 9:39 pm 

Today, Cassa depositi e prestiti Spa (CDP) has successfully placed its first Social Bond in the international capital market. It is the first Social Bond launched by an Italian issuer, as well as the first Social Bond in Europe dedicated to areas affected by natural disasters. The raised funds will finance Italian SMEs with less than 250 employees, through a liquidity platform allocated by the banking system. Such SMEs must not be involved in controversial business activities and shall be located in economically deprived areas or in areas hit by natural disasters. The proceeds will be managed under the CDP’s so-called Separate Account. 

CDP’s Social Bond is inspired by the United Nations Sustainable Development Goal (UN SDG) Number 8: “Decent Work and Economic Growth” and is in line with the International Capital Market Association (ICMA) Social Bond Principles 2017, focusing on: “employment generation including through the potential effect of SME financing and microfinance”. 

The transaction has been reserved for institutional investors, having a nominal value of € 500 million, at fixed rate, is a senior unsecured bond issue. The transaction, which is part of CDP’s medium-long term Debt Issuance Programme (DIP) amounting to € 10 billion, listed in the Luxembourg Stock Exchange, has a tenor of 5 years (maturity date November 2022), with an annual coupon of 0.75% and a re-offer price of 99.839%. 

In view of the strong demand of about € 2.25 billion, equal to about 5x of supply, which came from more than 150 investors, the pricing was fixed at 57 basis points above the reference mid-swap rate, about 3-8 basis points lower than the pricing guidance and about 14 basis points over the equivalent Italian Government Bond. Foreign investors responded with great interest, subscribing for more than 70% of the total issue, with a significant presence of SRIs. In terms of types of investors, 49% of subscribers were investment funds and management companies, 31% banks, 13% insurance companies and pension funds, and the remaining 7% central banks and other investors. 

The securities, which will be listed on the Luxembourg Stock Exchange, have CDP's medium-long term rating, BBB (stable) for S&P, Baa2 (negative) for Moody’s, BBB (stable) for Fitch and A- (stable) for Scope, in line with the Republic of Italy’s rating. 

The issue was arranged by Barclays, Crédit Agricole CIB, Citi, HSBC, Société Générale CIB and UniCredit, which acted as Joint Lead Managers and Joint Bookrunners.



Related documents