Environmental Finance, a magazine specializing in international and sustainable finance, has recognized Chile’s Treasury Ministry as the Green Bond Sovereign Issuer of the Year. Chile was selected due to its inaugural sovereign green bond transactions in 2019, which converted it into the first-ever sovereign Euro green bond issuer in the Americas.
Furthermore, the award recognized the high certification and verification standards of the green bond framework and the portfolio of selected projects. The financial performance of these transactions was also recognized for their low-interest rates, record demand, and their appeal to a wide diversity of investors.
This is the first time that the Treasury Ministry has received an award from Environmental Finance. It was also recognized by LatinFinance as Sovereign Issuer of the Year 2019, by GlobalCapital for the Latin American Green Bond of the Year 2019, by GlobalMarkets for the Public Debt Management Office of the Year, and by UNESCO for Netexplo Smart Cities 2020.
The Treasury Ministry issued approximately US$2.4 billion in Green Bonds during 2019. They were issued in two transactions during June last year. The first transaction was a Green Bond issued in US dollars maturing in 2050 totaling approximately US$1,431 million, which included a liability management transaction. The second transaction was a euro-denominated Green Bond maturing in 2031 totaling €861 million.
Both transactions attracted record demand from a broad spectrum of "green" investors and historically low rates and took advantage of historically low rates in the international market. In fact, a negative new issue premium was achieved in both cases, which is where the effective interest rates were below those estimated using secondary market information.
More information about the Republic of Chile's Green Bonds can be found on the institutional website: https://www.hacienda.cl/oficina-de-la-deuda-publica/bonos-verdes.html