The issuance of bonds with an environmental, social and corporate governance (ESG) approach continues to be active. On June 27, the government of the State of Mexico will place a sustainable bond for 3,000 million pesos, with a term of 15 years.
With the issuance of its inaugural bond, the State of Mexico will become the second federal entity in the country to place a thematic bond, after Mexico City was a pioneer, after having issued a sustainable bond for 2,000 million pesos in the 2017, although it has also placed green bonds, the first in 2016 and the second in 2018.
According to the document with information on the offer, the Mexican entity will use the resources to finance clean transportation programs, support for people in vulnerable situations, as well as actions that contribute to access to essential services.
Among the projects that it will seek to finance is the Naucalpan cable car, which connects the Minas San Martín area with the Cuatro Caminos Mexiport. Since it works with solar energy, it will stop emitting about 17,000 tons of carbon dioxide (CO²) per year. It also contemplates anchoring the Chalco-Santa Martha Trolleybus route.
In social matters, it will allocate resources for actions of prevention and attention to women victims of violence, as well as teenage pregnancy, among other points.
“To diversify financing sources, the State Executive will finance part of its public investment program with the issuance of sustainable stock certificates for up to 3,000 million pesos and will entitle holders to receive principal and interest through 180 monthly payments and consecutive, with a fixed nominal interest rate and a reserve fund equivalent to three months of debt service”, indicates the placement prospectus.
The issue, with ticker symbol “EDOMEX 22X”, will be launched on the Mexican Stock Exchange (BMV).
We have had a lot of activity in the issuance of green bonds and sustainable bonds. The issuance of the Mexican government for 3,000 million pesos will be a thematic bond”, said José-Oriol Bosch, general director of the BMV.
The government of the State of Mexico developed a reference framework for the issuance of green, social and sustainable bonds, which was endorsed by Sustainalytics, a rating agency for sustainability issues.
A sustainable bond is a fixed income instrument to finance projects with a positive environmental and social impact.