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NEW YORK & SANTIAGO, Chile–(BUSINESS WIRE)–Crédit Agricole CIB acted as joint sustainability structuring advisor for the Republic of Chile’s sustainability bond framework, as well as as active joint bookrunner on the sovereign’s first USD sustainability bond transaction. It was the first-ever sustainability bond issued by a sovereign anywhere in the world.

On March 2, 2022, after three days of marketing to investors, the Republic of Chile sold USD 2 billion of 20-year Sustainability Bonds (“SLBs”). The issue was priced at 4.340%, 200 basis points above 20-year US Treasuries, after compressing 40 basis points from the syndicates’ original price forecast. In a volatile market that required high concessions on new issues from most issuers, the final price obtained by the new 20-year SLB benefited from a “greenium” compared to a conventional issue.

The proceeds will be used for general budgetary purposes of the Republic. The coupon will be subject to an increase if the country fails to meet the Sustainability Performance Targets (SPTs) linked to two Key Performance Indicators (KPIs) outlined under Chile’s Sustainability Bonds — (1) Greenhouse Gas (GHG) Emissions, derived directly from Chile’s Nationally Determined Contribution (NDC) update and (2) Unconventional Renewable Energy Generation for the country.

Romina Reversi, Head of Sustainable Investment Banking for the Americas at Crédit Agricole CIB, said: “We are proud to have helped Chile structure the very first Sovereign Sustainability-Linked Bond Framework and pioneer the Sovereign Sustainability-Linked Bond Framework. Linked Bond. We hope that Chile’s alignment of its debt financing strategy with its international environmental commitments will inspire other countries, both in Latin America and around the world, to do the same.

The Sustainability-Linked Bond Framework, written in accordance with the five essential components of the Sustainability-Linked Bond Principles, 2020, has been externally reviewed and received a second-party opinion from Sustainalytics, a Morningstar, Inc. company. and an independent provider of ESG and corporate governance research, ratings and analysis. The opinion concluded that KPI1 was “very strong”, KPI 2 was “strong”, and considered the associated SPTs to be “ambitious” and “very ambitious”, respectively.

Through this sustainability bond, the Ministry of Finance, in cooperation with the Ministries of Environment and Energy, further strengthens its commitment to sustainable development. This SLB framework, in conjunction with Chile’s existing framework for Sustainable Bonds (2020), will provide the market with clear and transparent information regarding all future Green, Social, Sustainable and Sustainability Bonds (SLBs).

“We are proud and humbled to have been re-appointed by the Republic of Chile team, especially to be part of this innovative offering that has garnered such positive feedback from investors around the world. This was possible thanks to months of teamwork that began with the new SLB executive of the Republic of Chile and concluded with a successful broadcast, further strengthening our relationship with the Republic of Chile and its consolidation as sovereign leader in ESG bonds,” said Jorge Ramírez, Senior Country Officer Chile at Crédit Agricole CIB.

Chile became the first country in the Americas to issue green bonds in 2019 and continued its commitment as a leader in sustainability by issuing its first social bond transaction in 2020 and then a first sustainability bond transaction in 2021. ESG instruments now constitute approximately 30% of Chile’s sovereign debt stock.

About Crédit Agricole Corporate and Investment Bank (Credit Agricole CIB)

Crédit Agricole CIB is the corporate and investment bank of Crédit Agricole Group, the world’s 12th largest banking group in terms of Tier 1 capital (The Banker, July 2021). Nearly 8,600 employees across Europe, the Americas, Asia-Pacific, the Middle East and Africa support the Bank’s clients in meeting their financial needs anywhere in the world. Crédit Agricole CIB offers its large corporate and institutional clients a range of products and services in capital markets, investment banking, structured finance, commercial banking and international trade. The Bank is a pioneer in the field of climate finance and is currently the leader in this segment with a comprehensive offer for all its clients.

For more information, please visit www.ca-cib.com.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220311005416/en/

For more information, please contact:

Credit Agricole CIB

Jenna Lee – Communications Manager for the Americas

CACIB Americas

@[email protected]

Tel: + 1 212 2617328

Source: Crédit Agricole CIB