A bank with a social mandate for Europe
The Council of Europe Development Bank (CEB) is a multilateral development bank with an exclusively social mandate. Through the provision of financing and technical expertise for projects with a high social impact in its member states, the CEB actively promotes social cohesion and strengthens social integration in Europe.
The bank participates in financing social projects, responds to emergency situations and contributes to improving the living conditions of the most disadvantaged population groups. It carries out its mission within the strategic framework of a formal “Development Plan” that describes the logic underpinning its action and sets forth guidelines for its medium-term activity.
Acting on its mandate to promote social cohesion and integration in Europe, and to aid refugees, migrants and displaced persons, the CEB was the first multilateral development bank to disburse grants to provide immediate assistance to refugees from Ukraine. Just recently it has approved €980 million in new loans to support CEB member countries in dealing with the humanitarian emergency caused by the war in Ukraine.
Strong investor support allows CEB to upsize its transaction
In response to the ongoing refugee crisis, the CEB was able to swiftly leverage its updated Social Inclusion Bond framework and announced the mandate for a 3-year, US Dollar-denominated Social Inclusion Bond (SIB) during a more stable week for US markets.
The transaction, which NatWest supported as Joint Bookrunner, saw a strong book-building process from the start, with orders quickly reaching over $1.5 billion. Despite the CEB tightening the price on the back of high demand, order books grew further to more than $2.3 billion, allowing the CEB to upsize the transaction to $1 billion, doubling its ‘traditional’ $500 million SIB print. The spread was set at SOFR MS +21 bps / CT3+12.4bps, with a coupon of 3.000%.
Over 70 accounts across the globe participated in the transaction, which marked the CEB’s first public issuance in US Dollar for 2022. Investors based in the Americas took 25%, closely followed by investors in the UK and Ireland at 20%, and Asian investors at 19%. Middle East investors took 11%, accounts in Germany, Austria and Switzerland 9%, while other European investors accounted for 9% and Scandinavian investors for 7%. Socially Responsible Investors (SRI) provided very strong support to this transaction with over 75% of the issue allocated to them.
The CEB will primarily use the proceeds from this bond to support Ukrainian refugees. The transaction follows a €1 billion seven-year Social Inclusion Bond that the CEB issued in early April 2022 to bolster its response to the social crisis unfolding due to the war in Ukraine and to help its member states assist millions of refugees seeking safety.
Social Inclusion Bond to help meet Ukrainian refugees’ most urgent needs
Damian Carde, NatWest, said: “We’re proud to have been able to help the CEB again after joint lead managing their first US Dollar issuance under their Social Inclusion Bond Framework in 2020. At NatWest we’re committed to helping institutions such as the CEB access funding, and we are pleased that through our support for the CEB we can help make a difference to the millions of people severely affected by the war in Ukraine.”
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