CEB issues social inclusion bond in response to COVID-19 pandemic
2 April 2020
PARIS – Today the Council of Europe Development Bank (CEB) issued a €1 billion 7-year maturity COVID-19 Response Social Inclusion Bond. The funding will be used to support CEB member countries in mitigating the social and economic impact of the ongoing COVID-19 crisis.
The COVID-19 Response Bond is issued within the CEB Social Inclusion Bond framework, which is being adapted so that financing can be extended to the health sector, where countries have increased needs because of the pandemic.
In line with the Social Inclusion Bond framework, the proceeds raised will also finance new or existing social projects which support micro, small and medium-sized enterprises (MSMEs) in order to create and preserve jobs. The MSME sector has been hit particularly hard by the coronavirus outbreak across Europe.
The CEB has an exclusively social mandate and a strong track record of promoting social investments in Europe. This is the fourth social bond issued by the Bank since 2017 and is further strengthening its leading position in the social bond market.
Investor interest in the COVID-19 Response Social Inclusion Bond was impressive. Following the announcement of the transaction, the order book reached more than €3.9 billion in just over an hour. The deal also gathered the largest order book of any CEB benchmark to date, with final books standing in excess of €4.5 billion. This allowed the CEB to set the deal’s size at €1 billion, making it the largest ever social inclusion bond for the Bank.
“In these exceptionally difficult circumstances, we are pleased that the successful launch of the COVID-19 Response Social Inclusion Bond will support the needs of European countries severely affected by the COVID-19 outbreak and its consequences,” said CEB Governor Rolf Wenzel. “The CEB is stepping up efforts to provide maximum support to its members during the crisis and to help them tackle challenges in the period following the outbreak,” he added.
Full technical details of the transaction can be found here.
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (AA+ with Fitch Ratings, outlook positive, AAA with Standard & Poor's, outlook stable and Aa1 with Moody's, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.