BBVA acted as advisor and lead coordinator in the first-ever sustainable bond issued by Government of Navarre. For the first time in its history, Navarra will finance projects with a positive environmental or societal impact through capital markets.
The €50 million sustainable bond, set to mature in 2044, is issued under the Sustainable Finance Framework, which the Government off Navarre recently established and published, with BBVA’s support. The framework covers the social and environmental projects of the region’s General Budget and it is aligned with ICMA’s Green and Social Bond Principles and has been reviewed and received a favorable opinion from environmental consulting firm Sustainalytics.
The €50 million will be used to fund programs, initiatives and projects included in the 2019 project that promote a positive environmental and societal development in the region. The transaction’s success was underpinned by the alignment of Navarre’s Sustainability Strategy with the UN’s 2030 Agenda, which will have impact on several of the 17 Sustainable Development Goals of the United Nations.
With this pioneering initiative, the Navarre Government joins the group of cities and regions issuing sustainable debt. This way, the Community also diversifies its investor base, as the bond is designed to appeal to socially responsible European investors.
Daniel Rayak, member of the fixed income sales team and Sustainable Bond Group of BBVA Germany said that “BBVA is very happy with its role as intermediary in the first sustainable bond issued by the Government of Navarre. The interest shown by Central European investors demonstrate BBVA’s strong presence in Europe, and to its reputation as a leader in sustainable finance. It is an honor to be a trusted partner of our customers, both from an issuer and an investor standpoint. BBVA will continue promoting sustainable finance in benefit of all our customers and stakeholders.”
"BBVA will continue promoting sustainable finance in benefit of all our customers and stakeholders"
Mikel Aranburu, Regional Minister of Economics and Financial Policy of the Government of Navarre, expressed his satisfaction for the transaction, which marks the Community’s debut in the sustainable debt market: “this bond issue represents an opportunity to tie our Community’s financial and sustainability strategies, and entails a double commitment by the Navarre Government: on the one hand, to transparency, and on the other, to the alignment of public policies with the funding of a sustainable development consistent with the UN Agenda 2030.”
With this pioneering initiative, the Chartered Community of Navarre joins the group of cities and regions issuing sustainable debt
BBVA, a leader in sustainable finance
As a sign of its firm commitment to the fight against climate change, BBVA approved its Pledge 2025 in 2018 through which the bank will mobilize €100 billion from now until 2025 in green financing, sustainable infrastructure, social entrepreneurship and financial inclusion. The bank has the capacity, knowledge and experience to provide its clients superior advisory services for sustainable financing solutions and is playing a key role in developing this market.
2018 proved to be a year of consolidation for green, social and sustainable bonds. As issuer, BBVA has approved its framework for the issuance of sustainable bonds linked to the UN Sustainable Development Goals and successfully concluded the inaugural green issues of BBVA and BBVA Bancomer, as well as Garanti’s first gender equality bond. As arranger and bookunner, BBVA has maintained its leadership in the market, participating in 13 transactions.
This is not the first time that BBVA has worked with the Public Sector in Spain. The bank has acted as sustainable advisor and lead arranger in the green and social bond issues by the Community of Madrid and the Basque Country, as well as public company ADIF AV.
About the Chartered Community of Navarre
Navarra has achieved the highest possible credit rating for an Autonomous Community, A+ with a positive outlook, the best in Spain. This is due to a number of factors, including its solid financial policies, its high degree of fiscal autonomy, its debt repayment-focused policies and its capacity to restructure its public debt securing better conditions. In 2018, Navarre achieved a budgetary surplus of 0.55 percent and reduced its debt by 5 percent. The total debt of the Community in the last quarter of the year amounted to €3.45 billion, which represents 16.8 percent of its GDP.
Other interesting stories