South American banks are busy focusing on sustainable investment opportunities. Santander Chile announced its first sustainable bond incorporating ESG (Environmental, Social, Governance) criteria and focusing on the segment of Women SMEs. Interestingly, the bond was a private placement from a Japanese investor with the advisory of Daiwa Securities Capital Markets.
The bond was for $50 million at a rate of .71% over three years. The company seeks to grow businesses operated by women. The specific objective of this transaction is to refinance or finance new loan operations to small and medium enterprises.
The loan book is just under $400 million. Santander has an overall objective to increase the growth of businesses operated by women on a global bases, but this new bond is its first in the Chilean market. While Chile is considered a developed market, Santander has been focused on its core market with ESG in Europe and other key markets until now.
The CEO Miguel Mata commented, “This sustainable bond is in line with the strategy the Bank is pursuing on a global basis in ESG issues and reflects our solid leadership position in sustainability indexes such as Dow Jones, Vigeo Eiris, MSCI, FTSE4Good and S&P IPSA ESG. The result of this operation also conveys the excellent perception from international investors, even in times of high uncertainty that we are facing in the world.”
It is noteworthy that the investment into Chile is coming from Japan, showing the global push and interest in sustainable investments, and how investors will look outside its core market for opportunities.
Santander Chile referred to steps in the UN Sustainable Development Goals (UN SDG). The entity defined 10 commitments to adhere to the UN SDG, and Santander Chile noted in particular “the commitment to help people progress and reap the benefits of financial inclusion through products and services and through education of these matters.” Banco Santander Chile is the largest bank in the Chilean market for both loans and assets.