Mexico City – The North American Development Bank (NADBank) participated in the financing of a MXN$339-million joint issuance of asset-backed securities (ABS) under a sustainability framework—the first joint issuance of a sustainable bond in the Mexican stock market. The securities were issued by four non-bank financial institutions that offer loans to micro, small and medium-sized companies, mainly in in agroindustry sector.
The sustainability bond was structured by Inteligencia Capital along with IDB Invest as lead investor, who subscribed MXN$203.4 million of the securities. NADBank subscribed MXN$67.8 million through its Green Loan Program, which supports financial intermediaries seeking to promote green projects aimed at enhancing the sustainability of the U.S.-Mexico border region. The rest of the issuance was purchased by other institutional and private investors. The Trusts Instituted in Relation to Agriculture (FIRA) in Mexico provided a partial guaranty equivalent to 20% of the total issuance.
The bond is backed by the securitization of icollection rights of four non-bank financial institutions: Crédito Especializado al Campo S.A. de C.V., SOFOM ENR (CRESCA), Proaktiva S.A.P.I. de C.V. SOFOM ENR (Proaktiva), Servicios y Financiamiento Agrícola S.A. de C.V. SOFOM ENR (Sefia) and Soluciones Financieras Internacionales S.A. de C.V. SOFOM ENR (SFI), which offer financing primarily to companies in the agroindustry sector in Mexico.
IDB Invest and NADBank complemented their financing with technical assistance to help the four companies design and implement a thematic portfolio management system, develop standardized thematic portfolio reports for public disclosure and consolidate the Environmental and Social Management Systems (ESMS) recently created for each participant.
NADBank recently established its Green Loan Program to increase long-term financing options for small and medium-sized intermediaries seeking to promote green projects that will enhance the sustainability of their region.
In the agricultural sector in particular, NADBank seeks to promote investments in sustainable food value chains, the efficient use of natural resources, sustainable management of waste in agriculture, and efficient irrigation infrastructure and water pumping, as well as the use of renewable energy for agricultural activities and throughout the food production chain.
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NADBank is a financial institution established and capitalized in equal parts by the United States and Mexico for the purpose of financing environmental infrastructure projects along their common border. As a pioneer institution in its field, the Bank is working to develop environmentally and financially sustainable projects with broad community support in a framework of close cooperation and coordination between Mexico and the United States.