The Basque Government launches an issue of sustainable bonds for 600 million that will finance 86% expenses derived from the Covid-19 crisis
Most of the revenues from this fourth issue will go to health, education and social programs, while 14% will finance environmental programs
The Basque Government will launch a new issue of sustainable bonds worth 600 million euros. This will be the fourth issuance of this type of bonds that are destined to sustainable and social policies, although on this occasion the percentage destined to the social, health and education part will be higher “in order to face the exceptional situation generated by Covid-19 “, according to sources from the Department of Economy and Finance.
Specifically, it will 86% of the income to social programs, while 14% will go to environmental programs.
Specifically, 49% will go to projects related to social housing, job creation and socioeconomic development; 22% will be for health to reinforce health personnel due to the pandemic, invest in hospitals and health centers and finance spending on pharmacy; while Education will have 15% of the bonus, either to hire more teachers in light of the needs created by the covid, invest in educational centers, from haurreskolak to FP, finance scholarships and strengthen the UPV / EHU.
The remaining 14% will be allocated to environmental programs related to renewable energy, sustainable transport, environmental prevention and control, and water management.
The issue will be carried out “as soon as the market situation is favorable” and the entities responsible for the operation are Norbolsa and BBVA, and Banco Sabadell, Banco Santander, Caixabank, HSBC and ING participate in it, as indicated from the department headed by Pedro Azpiazu.
The issue is part of the increase in the Basque Government’s debt capacity following the agreements of the Mixed Committee of the Economic Agreement of September 30, and the approval in the Basque Parliament of the modification of the General Budgets Law of the CAE 2020 that allows increasing the debt capacity of 1,374.5 million euros this year.
This is the second issue of sustainable bonds this year, the first being 500 million euros, the demand for which was more than 7 times higher than the offer, specifically 3,521 million, with 120 investors from 17 countries.
As a whole, it is the fourth issue of the Euskadi Sustainable Bond since 2018, and the global amount of the four issues amounts to 2,200 million.
As for the situation of the Basque debt, this year the Government has carried out debt operations for 885.5 million euros. This includes the issuance of bonds for sustainability for 500 million euros; a private placement of bonds for 81.50 million; another for 105 million, private placement of sustainable bonds for 59 million and a loan from the European Investment Bank for 140 million.
The total outstanding debt of the Basque Government could reach 10,832 million euros in December 2020, representing 16.3% of GDP.