ING’s first social covered bond boosts Austria’s social infrastructure

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27 July 2017

ING has teamed up with Austria’s Kommunalkredit, a specialist bank for infrastructure financing, on a social covered bond that will support the development of infrastructure projects with an emphasis on education (schools, universities), health (hospitals, rehab centres), and social housing.

ING is joint bookrunner in the EUR 300 million bond, and part of a syndicate of four banks. It is the first social covered bond ever issued in Austria, and second in the market.

“This collaboration clearly allows us to consolidate our position in the market as active advisors for clients who want to become more sustainable,” said Claudio Livolsi, from debt capital markets origination.

The funds will be used to finance existing social infrastructure projects, but also invest in new projects in Austria (80 percent of the funds) and the rest of Europe.

“We’re proud to help Kommunalkredit in their mission to support sustainability projects in energy and the environment, social infrastructure, and transport. I’m confident that we’ll build on this experience to arrange more social covered bonds in Europe and the rest of the world together with our Sustainable Finance team,” added Livolsi.

The funds will be used to finance existing social infrastructure projects, but also invest in new projects in Austria (80 percent of the funds) and the rest of Europe.

The funds will be used to finance existing social infrastructure projects, but also invest in new projects in Austria (80 percent of the funds) and the rest of Europe.

Impact on society

Speaking on ING’s role in this relatively new bond category, Head of ING’s Sustainable Markets Hans Biemans said that ING has been contributing to the creation of the ICMA Social Bonds Principles, process guidelines released in 2017 to promote integrity in the development of the social bond market.

“Having been part of the ICMA Social Bond Principles working groups since the project started, I am confident that this document provides guidelines to clarify the issuance of a social bond,” said Biemans.

Leading sustainability rating agency Sustainalytics has evaluated the transaction in a "Second opinion" report and acknowledged the contribution of this bond to European Commission’s Europe 2020 growth strategy to become a smart, sustainable and inclusive economy.

In addition to addressing the needs of vulnerable populations such as youth, elderly, and low-income households, the projects’ outcomes will help achieve United Nation’s Sustainable Development Goals (SDGs) such as no poverty, good health and well-being, quality education and sustainable cities and communities.

What’s a social covered bond?

Social bonds are recently developed categories of the sustainable financing sector. Funds are used for social projects with positive social outcomes, such as giving access to essential services like health, education, financial services, affordable housing, and basic infrastructure like sanitation, transport, and clean drinking water.

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