Client stories

Demand soars for CADES’s fifth Social Bond in 2022

Amortising French social debt

In 1996, the French government set-up the Caisse d’Amortissement de la Dette Sociale (CADES) with the aim to amortise French social debt by issuing debt securities on international financial markets in a diverse range of currencies. 

Supervised jointly by the Minister of the Economy, Finance and the Recovery and by the Minister for Solidarity and Health, CADES operates under the control of the French Parliament and the Constitutional Council. 

CADES is well integrated into the French social system, having strong joint governance, co-chaired by a Board of Directors and a Supervisory Committee, which includes four members of the French Parliament. Backed by the French Parliament, CADES is one of the most significant institutions involved in the control and reduction of French social debt by using efficient and proven amortization and financing mechanisms.

CADES’s Social Bond Framework, published in 2020 and verified by Second Party Opinion (SPO) provider Vigeo Eiris, states that social bonds proceeds will go towards the financing or refinancing of four ‘branches’ of the French social security system: ‘Illness’, ‘Workplace injury’, ‘Elderly’, and ‘Family’.

Investors remain hungry for CADES issuances

Looking to issue its fifth Social Bond for 2022, CADES asked NatWest to support the transaction in the role of Joint Bookrunner. 

CADES’s announcement of a US Dollar Social Bond was immediately met with strong investor interest. When order books opened demand quickly soared to over $6.2 billion, allowing CADES to opt for a transaction size of $3.5 billion and to tighten the price, with a final spread of SOFR MS+30bps.

Investors based in the Americas received 34% of the allocation, UK investors 28%, and Eurozone investors 9%, while 13% went to other European countries, 11% to investors in Africa Middle-East and 6% to Asia-Pacific. Central banks and official institutions purchased 43% of the issue, followed by banks with 42% and institutional investors with 12%. 

This transaction was part of CADES’s €40 billion issuance programme for 2022, which since the beginning of the year, has successfully raised a total of €19.4 billion through Social Bonds. This 3-year benchmark also represents the second US Dollar Social Bond issued by CADES this year, following their $2 billion 10-year issuance in January.

Improving the life quality of each citizen

Damien Carde, NatWest, commented: “We’re delighted that CADES has yet again achieved a very strong outcome for a Social Bond, and we’re proud to have worked again with them after lead-managing two US Dollar transactions for them in 2021. At NatWest we’re committed to helping organisations across the UK, Europe and the US to access funding for their sustainability initiatives.”


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