Mexico issues for the second time a bond linked to the SDGs with the support of UNDP.
Second bond issuance of 1,250 million euros to achieve the Sustainable Development Goals in Mexico
Posted July 7, 2021
Mexico City, July 6, 2021 - Mexico renews its commitment to the Sustainable Development Goals (SDGs) by issuing a second emission of a 15-year SDG Sovereign Bond for a total value of 1,250 million euros, to increase sources of financing for development and contribute to the achievement of the 2030 Agenda goals.
This financing will be linked to public programs that contribute to the achievement of the SDGs in the country, particularly in reducing inequality gaps. This bond was reissued under the “Sovereign Bond Framework of the SDGs” that was released in February 2020, and prepared with the support of Natixis. The operation reached a demand of 2.6 times the amount placed among the 154 global investors who participated.
“This second issuance of the ODS Bond by Mexico consolidates the Sovereign Bond Framework supported by the United Nations Development Program (UNDP). Through this new issuance, not only sustainable growth in financing sources was achieved, but also a longer maturity. Given these new financial conditions, the level of confidence of the markets in the country and the commitment to achieve the SDGs is reaffirmed, "said the UNDP Resident Representative in Mexico, Lorenzo Jiménez de Luis.
Since 2020, UNDP has accompanied this initiative. In particular, at the request of the Government of Mexico, it issued a statement on the alignment of the Framework with the principles of the 2030 Agenda and the Sustainable Development Goals.
In 2021, UNDP will refer to the Impact Report of the bond issued the previous year. Investors welcomed the participation of UNDP, since they relate it to a strengthening of both, the transparency environment, as well as the monitoring of the expected impacts of this type of financing.
“The issuance of this second sustainable 15-year bond helps to consolidate Mexico's sustainable yield curve; It must be noticed that the first bond was placed for 7 years on September 14 last year. This curve will be a reference for Mexican corporations, private and public, to execute their sustainable financing programs at the lowest cost. In addition, it will promote the development of market instruments for sustainable financing and expand the investor base, "said the Undersecretary of Finance, Gabriel Yorio.
UNDP is convinced that the Sovereign Bond Framework of the SDGs reinforces Mexico's commitment to achieve these goals through three mechanisms: strengthening budget transparency; increasing social spending aimed at promoting sustainable development and, finally, contributing to the development of capital markets by issuing new sustainable financing instruments.
"UNDP congratulates the Government of Mexico for this new issuance of the SDG Bond and reaffirms its commitment to provide the Ministry of Finance with its opinion and recommendations to monitor the impacts of this instrument”, said Luis Felipe López Calva, Regional Director for Latin America and the Caribbean from UNDP.
UNDP works in all countries providing technical knowledge and advice so that governments can issue new financing instruments that contribute to the achievement of the Sustainable Development Goals.
The broad and comprehensive vision of the 2030 Agenda opens opportunities for bond issuers to address topics related to sustainable community projects, education, gender, health, among others. Also, given the impact that green bonds have had in increasing awareness levels about climate risks, as well as in promoting the development and financing of projects focused on reducing the carbon footprint, the ODS bond market can do so among the population and the broad investment community, about the social challenges that require a sustainable solution and actively address these challenges with new financial instruments.