IDB Invest Issues MX$2.5 Billion Social Bond to Fund Mexican SMEs

IDB Invest has completed its largest debt issuance in Mexico, placing a MX$2.5 billion (US$134 million social bond to expand financing for small and medium-sized enterprises (SMEs).

The bond, listed on the Institutional Stock Exchange (BIVA),  attracted demand of MX$4.65 billion—1.9 times the amount offered—marking the highest demand IDB Invest has achieved for this type of issuance in Mexico. Pricing was set at TIIE Fondeo +0.31%.

Investment funds acquired 63% of the issuance, followed by banks and brokerage firms (18%), financial advisors (17%), and government entities (2%). The transaction received top local ratings of AAA.mx from Moody’s and AAA(mex) from Fitch Ratings. Banco Santander and BBVA acted as joint lead managers.

Proceeds will be directed to SMEs, which IDB Invest called “key drivers of economic growth and formal job creation in Mexico.” The institution noted that its social bonds have already supported 360,000 micro, small, and medium-sized enterprises and contributed to the creation of 13,000 new jobs nationwide.

“This transaction reaffirms IDB Invest’s commitment to promoting sustainable development through the private sector,” the organization said in its announcement.

The issuance is the fifth under IDB Invest’s Sustainable Debt Framework in Mexico and the eleventh since the program began in 2007. The institution has recently expanded its use of local currencies, including Mexican pesos, Colombian pesos, Brazilian reais, Dominican pesos, and Paraguayan guaraníes as part of its strategy to provide financing that mitigates exchange rate risks while promoting sustainable debt.