The OPEC Fund for International Development, a multilateral development finance institution headquartered in Vienna, Austria, issued its first benchmark bond issue on the capital markets on Wednesday. The bond was priced based on the SDG (Sustainable Development Goals) bonds, for which Credit Agricole CIB acted as sole sustainability advisor. The 3-year fixed rate sustainability bond has met with strong demand from investors around the world and will be used to fund or refinance key sustainable development projects that are aligned with the OPEC Fund’s multi-sectoral development mandate and directly contribute to the achievement of the… contribute to the SDGs.
The bond attracted very broad interest: 52 percent of investors came from Europe, the Middle East and Africa (EMEA), 27 percent from Asia Pacific (APAC) and 21 percent from North America (NAM). In terms of investor type, central banks and public institutions accounted for 62 percent, banks 19 percent, wealth managers 9 percent and insurance companies/pension funds 8 percent.
Distribution by Investor Type
OPEC Fund Director General Dr. Abdulhamid Alkhalifa said today: “The strong demand for our first benchmark is a testament to investor confidence in the OPEC fund and our long-standing development-focused mandate. It also confirms interest in sustainable investing globally. At a time when the need… As financing for development increases, the OPEC Fund is proud to have reached this milestone. It will enable us to mobilize additional resources to support our partner countries. The OPEC Fund has a 47-year track record in development cooperation, and the additional funds will allow us to further increase our impact.”
The OPEC fund finances development projects in low- and middle-income countries as part of its South-South cooperation mandate. Bond proceeds will be allocated according to specific criteria defined in the SDG Bond Framework, with a focus on food security, healthcare, infrastructure, education, employment and renewable energy. The framework is aligned with the Sustainability Bond Guidelines 2021, the Green Bond Principles 2021 and the Social Bond Principles 2021 published by the International Capital Market Association (ICMA) and has been positively evaluated by the second party opinion provider Sustainalytics.
The success of the first benchmark bond was supported by a rating of AA+ (stable) from Fitch Ratings and AA (positive) from S&P Global Ratings, which favored the fund’s cautious financial risk profile, excellent capitalization, conservative liquidity and risk management, its creditor treatment and its diversified portfolio of restricted assets.
Deputy Director General of OPEC Fund for Financial Operations Tarek Sherlala added: “These increased financial resources will allow us to intensify our work in partner countries and increase our development impact. The support of global investors will increase our creditworthiness and help us in usher in a new phase of our effective and sustainable development cooperation.”
OPEC Fund Head of Financing Martine Mills Jansen said: “This bond pricing is an important milestone for the OPEC fund and the culmination of several years of intensive work. The success of our first bond issue in the current market environment is a testament for the strength of our credit standing. We are pleased to join the community of multilateral development banks issuing to the capital markets. This is an important step in the establishment of our lending program and we look forward to continuing our engagement with investors.”
Ebba Wexler, Managing Director, Head of SSA DCM, Citi, said: “This is an outstanding achievement for the OPEC fund’s first capital markets transaction. The award for the first $1 billion transaction with more than 40 investors in the Book is an impressive achievement and the deserved result after a major global marketing campaign
Tanguy Claquin, Global Head of Sustainability at Crédit Agricole CIB, said: “The success of this landmark issue reflects both the credit strength of the OPEC fund and its commitment to sustainable development. This is also an excellent benchmark first public transaction. This is an important step towards the OPEC Fund’s long-term presence in international capital markets and the creation of a diversified financing program capable of supporting the Fund’s global development mandate.This transaction also underscores OPEC’s significant contribution Fund on the Sustainable Development Goals.”
Lars Humble, Managing Director, Head of SSA, Goldman Sachs, said: “This was a successful first benchmark transaction for the OPEC Fund for International Development and we were delighted to be involved. The Issuer had expressed over engaged extensively with potential investors for many months and it was great to see such a well diversified, high quality order book after thorough preparation.The size of the transaction was $1 billion at a final pricing that was 5 basis points below close to the original asking price underscores investors’ strong confidence in the name and overall success of the transaction.”
Spencer Dove, Managing Director at Nomura, said: “The opportunity to bring a new loan to market is extremely rare, especially for a supranational country with such a track record in sustainable development. Today’s success reflects the significant work , which the OPEC Fund team has done to achieve the goals set in the Strategic Framework 2030 and to become a pre-eminent MEB in the capital markets.The quality and diversification of the order book is a clear signal of the work done and the positive engagement of the global fixed income community.”
Laura O’Connor, Managing Director, Origination and Syndication, TD Securities, Dublin, said: “This bond issue will serve as a liquid reference point from which the OPEC fund can continue to grow its presence in the US$ market. Given the Given the scale of the global financing needed for sustainable development, access to debt capital markets for another multilateral development bank that can catalyze the flow of capital into high-impact projects is an important milestone.”
Information on The OPEC Fund
The OPEC Fund for International Development is the only development agency with a global mandate that only allocates funds from member countries to non-member countries. The organization works with partners in developing countries and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established in 1976 with a clear purpose: to advance development, strengthen communities and empower people. Our work is people-centred, focusing on funding projects that meet basic needs such as food, energy, infrastructure, employment (especially related to MSMEs), clean water and sanitation, health and education. To date, the OPEC fund has committed more than US$23 billion to development projects in over 125 countries at an estimated total project cost of US$190 billion. The OPEC fund is rated AA+/outlook stable by Fitch and AA, outlook positive by S&P. Our vision is a world where sustainable development is a reality for all.
Important NOTE:
The securities to which this publication relates (the “Securities”) have not been and will not be registered under the United States Securities Act of 1933 (the “Securities Act”) and may only be offered or sold in the United States to persons who are are reasonably qualified institutional buyers (“QIBs”), as defined in Rule 144A of the Securities Act (“Rule 144A”), who are also qualified buyers (“QPs”), as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940, as amended, in reliance on Rule 144A or any other exemption from registration under the Securities Act, or in a transaction not requiring registration. There will be no public offering of the Securities in the United States.
Recipients of this publication who intend to purchase securities in the future are cautioned that any such purchase or subscription may be made solely on the basis of the Base Prospectus dated 31 May 2022 and its supplements (collectively, the “Base Prospectus”), the Price Supplement and the price notice made in connection with such securities.
In addition, in the United Kingdom, this publication is only being distributed to (i) professional investors within the meaning of Section 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth individuals and others distributed to and directed at persons to whom it may lawfully be communicated within the meaning of Article 49(2)(a)-(d) of the Order (all such persons collectively being referred to as “relevant persons”). In the UK, any investment or investment activity to which this communication relates will only be available to, and will only be undertaken with, relevant persons. Any person who is not a Relevant Person should not act or rely on this publication or any of its contents.
Manufacturer’s target market (MIFID II/UK MIFIR Product Governance) is Eligible Counterparties and Professional Clients only (all distribution channels). No EEA PRIIPs Key Information Document (KID) as not available for retail in the EEA. No UK PRIIPs Key Information Document (KID) as the issuer is exempt from the UK PRIIPs Regulation.
For the avoidance of doubt, neither the Issuer’s SDG Bond Framework nor the related Second Party Opinion form or form part of the Base Prospectus or any other material referred to in this publication.
A rating is not a recommendation to buy, sell or hold any security and may be changed, suspended or withdrawn at any time by the assigning rating organization.
This article is originally published on finanznachrichten.de/
