Supporting citizens throughout their life journey
Communauté française de Belgique (CFB), the French community of Belgium, is an entity of the Belgian Federal State with its own constitutionally protected powers as well as both legislative and executive institutions.
Out of the 11.5 million citizens in Belgium, the CFB delivers services to an estimated 4.6 million French-speaking people in Wallonia and Brussels. Its competences comprise the entire educational system, culture (fine arts, performing arts, radio and television, and sports), the use of languages and selected social affairs such as youth aid, early childhood, promotion of health in schools, and social aid to prisoners.
Given the social nature of the CFB’s responsibilities and its commitment to voluntarily align with best market-practices, the CFB developed a Social Finance Framework in June 2021, hoping to contribute to the growth of the Sustainable Capital Markets and attract responsible investors to its debt issuance. Eligible social projects in the framework, for which ratings agency ISS ESG provided a Second Party Opinion (SPO) and which allows for a broad range of debt instruments to be issued, include: educational programs and facilities from nursery school to tertiary education, financial support for students, investments and expenditures in adult learning, reintegration projects, public sports spaces and sports programs, and investments in cultural facilities. The Eligible Social Expenditures are also mapped to the UN Sustainable Development Goals (“SDGs”), supporting six of the 17 SDGs.
ESG investors dominate order book
Following the publication of its Social Finance Framework, CFB chose NatWest Markets as Social Joint Structurer as well as Joint Active Bookrunner for its inaugural Social Bond, a EUR 500m issuance due in June 2035.
On the back of positive investor feedback, following 1-on-1 investor calls to present CFB’s new framework, and a stable market backdrop, the order book reached a volume of EUR 1.4bn, allowing CFB to set the coupon at 0.625%.
65% of the bond went to ESG investors, underlining CFB’s strong ESG narrative and investors’ desire to support the growing sustainability momentum in Belgium. Greatest demand came from investors in Germany, Austria and Switzerland (45% total), followed by investors from France (35%) and BeNeLux (9%).
Investors have confidence in CFB’s ESG strategy and policies
Jean-Francois Masure, Head of the Debt Agency at CFB, commented on the transaction: “Our conventional benchmark issued in November last year marked our return to the EUR public bond market after almost a 10-year hiatus. We are very pleased about our successful return, celebrating our Social Bond debut. We are excited to receive such strong support from investors, in particular ESG investors, for our programs that ensure high quality education, inclusion and gender equality, ultimately improving the life quality of each citizen.”
Caroline Haas, Head of Sustainable Finance, Financial Institutions and SSAs, NatWest, said: “We are delighted that CFB has achieved a very strong outcome for its debut Social Bond, which highlights investors’ confidence in the quality of CFB’s credit as well as in its ESG strategy and policies with a particular focus on education and sport programmes. CFB’s transaction also marks the growing uptake of sustainable finance within the Belgian market, initiated by the Kingdom of Belgium and its inaugural Green bond in 2018.”
Dr Arthur Krebbers, Head of Sustainable Finance, Corporates, added: “We are delighted to have supported CFB with this transaction, which also marks the growing uptake of sustainable finance within the Belgian market, including prior issuances from the Flemish Region and Walloon.”
Fabien Dominique, Financing & Risk Solutions, NatWest, said: “This transaction is strong evidence of NatWest acting as a sustainable, purpose-led bank that champions communities in the UK and Europe and helps them to thrive.”
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