Spain's ICO becomes a main issuer in Social Bond market
This article is part of an external communications campaign by ICO
Updated : 14:26
Instituto de Crédito Oficial –ICO– (www.ico.es) is a state-owned bank attached to the Ministry of Economy and Finance of the Spanish Government. With more than 30 years’ experience, ICO has become a leading credit institution in financing SMEs and large-scale infrastructure projects in Spain and abroad. The Institute’s purpose is to boost any economic activity which, on account of its social, cultural, innovative or ecological significance, merits promotion and development.
On 27th January 2015, ICO issued its debut EUR 1bn December 2017 3-year Social Bond. ICO’s Social Bond supports its activities of extending credit to “small, medium or micro enterprises” (SMEs) through its second-floor facilities with an emphasis on creating and retaining employment in specific economically underperforming regions in Spain. The issue benefited from a positive second opinion from Sustainalytics, the specialized environmental, social and governance (ESG) research firm. This opinion showed that ICO was targeting areas that would most benefit from employment creation by focusing on regions where high unemployment has persisted since the financial crisis of 2009. This was the first social bond to be issued by ICO and the largest bond issue in the capital markets with a social objective – a testament to the Institute’s commitment to support and promote economic activities that help to increase and improve the distribution of wealth in Spain.
On the first anniversary of the notes, as agreed by ICO at the time of the issue, the Institute published a Social Bond report showing how the proceeds had been allocated. Sustainalytics carried out a compliance review and confirmed that the recipient SMEs fulfilled the criteria to receive the funds in all material respects.
ICO funding program for 2016 totals €4-5bn and is guaranteed by the Kingdom of Spain, which applies to all ICO debt. This guarantee is explicit, irrevocable, unconditional and direct. ICO plans to issue another Social Bond in 2016.