Nacional Financiera (NAFIN), one of Mexico’s leading development banks, has decided to allocate a total of MXN$7.8 billion of sustainable debt in the local market with the aim of financing green and social projects that contribute to the achievement of the Sustainable Development Goals (SDGs). This transaction is the first of its kind and is aligned with NAFIN’s commitment to fighting climate change and promoting sustainable finance and development.
This transaction is one of the most well received by the market with local investors participation.
The bond was denominated in MXN$ and issued in three tranches, two of which were under the Sustainable Bond Framework with the following characteristics:
- MXN $6.5 billion, 10 years, 7.79% fixed rate, due 2031
- MXN$ 1.3 billion, 5 years, TIIE-28 minus 5bp, due 2026
The transaction included a third tranche of MXN$ 2.2 billion with a maturity of 3 years. The placement agents were BBVA, Citi Banamex, and Scotia Inverlat. They were rated with mx/AAA and HRAAA local currency scale.
In November 2021, Nacional Financiera published its Sustainability Bond Framework which allows the institution to issue green, social or sustainability bonds in alignment to the Sustainable Development Goals (SDGs) targets. The Framework is the foundation document for thematic bonds issuance that clearly sets forth the entity’s proposed use of the bond proceeds. The framework is a transparency and disclosure tool that includes information on the eligible categories into which the projects to be financed or refinanced fall. It also provides information on the issuers process to select and evaluate projects and reporting guidelines under which the issue will annually report project’s impact. Frameworks allow investors to better assess the eligibility of projects and make more informed investment decisions.
NAFIN’s Framework is aligned to the best international market practices and to the International Capital Market Association (ICMA) Guidelines for Sustainable Bonds (GSB) 2021. Moreover, the Framework received a favorable Second Party Opinion from Sustainalitycs, the leading external reviewer of thematic bond frameworks worldwide. Throughout the Framework, NAFIN will support sustainable projects in the transport, energy efficiency, renewable energy, and sustainable waste management areas. Social categories are focused on supporting Micro, Small, Medium Enterprises (MSMEs) with special attention to young entrepreneurs and women-owned companies.
Nacional Financiera (NAFIN) is a Mexican Development Bank focused on contributing to the economic development of Mexico by facilitating (MSMEs, entrepreneurs and priority investment projects) access to financing and other business development services, as well as to contribute to the formation of financial markets, and to act as trustee and financial agent of the Federal Government. Nafin has been key in supporting the Mexican Government’s climate agenda and transition to a low carbon economy.
This initiative is implemented by the Global Green Growth Institute (GGGI) throughout the project “Sustainable NAFIN 2021-2022”.
GGGI collaborates with a wide variety of public and private partners worldwide to design and deploy sustainable financial instruments and mechanisms.