“Drought-Riven Chile Makes World First in Environmental Bonds” – Bloomberg – March 2, 2022

On March 2, 2022 Bloomberg reported that “Chile issued bonds tied to sustainability goals, the first nation in the world to do so, as the country wracked by a decade-long drought looks to cut greenhouse gas emissions, and obtain cheap financing.

The government sold $2 billion in dollar-denominated, sustainability-linked bonds maturing in 20 years, according to a person with knowledge of the matter. The offering yields 2 percentage points above Treasuries after initial discussions in the area of 2.4 percentage points, said the person, who asked not to be identified as the details are private.

Chile’s government is already the biggest issuer of environmental, social and governance bonds in Latin America, with $31 billion in sales, and is now looking to boost its green credentials still further. The sustainability-linked bonds pay a set penalty to investors if the seller fails to meet certain targets — in this case tied on greenhouse gas emissions and renewable energy generation.”

Subscribers may read the article on the Bloomberg internet site.