In a world first, Mexico has issued the world’s first sovereign bond linked to the sustainability development goals set by the UN, in a development that sees it raising $889.73 (750 million euros).
In a statement Mexico’s Deputy Finance Minister Gabriel Yorio said, financial inclusion, reduction of inequality and gender gap, were among the U.N. goals.
“Mexico is the first country to issue a sovereign bond that is linked to the sustainable development objectives of the U.N.,” tweeted Yorio. “Our country starts its sustainable finance program as a pioneer.”
The Mexican government did not spell out how it would spend the money it has raised.
Incidentally, at the time of the issue, the bond’s preliminary investment prospectus stated, there was no guarantee that Mexico would disburse the funds for projects that meet the United Nation’s sustainable development objectives.
The bond issue is part of an emerging trend of debt issuance aimed at raising funds that attempt to tackle social, environmental and other issues. It was oversubscribed by more than six times.
“The coupon of 1.350% was the second lowest among all euro-denominated bonds issued by the Mexico federal government,” said the ministry; this allows the Mexican government to borrow at an attractive rate.
The bond matures in September 2027.
In a statement Mexico’s Finance Ministry stated, “the euro bond allowed Mexico to tap into international investment funds, many of them in Europe, that are committed to financing sustainable economic development.”
Last week, Mexico had presented a tight budget that sees budgetary allocation cuts in almost every sector. One of the sectors that escaped this was heath.
According to a draft circulated by members of Congress, the government has outlined a slight increase in real terms for Petroleos Mexicanos over its planned 2020 budget; it has also included around $2 billion for the construction of a new oil refinery.