Citi Announces $1bn Social Finance Bond10.29.2021
Proceeds to Expand Access to Financial Services, Affordable Housing, Healthcare and Education to Support Citi’s $1 Trillion Sustainable Finance Commitment by 2030
Citi to Expand Access to Essential Services for 15 Million Households, Including 10 Million Women, Globally by 2025
Citi announced the offering of the inaugural Citi Social Finance Bond, a $1 billion bond that supports social-focused developments in emerging markets around the world. The use of proceeds from the bond will finance a range of projects, including those that expand access to financial services, affordable housing, basic infrastructure, healthcare, and education in underserved and unbanked communities in emerging markets. The bond offering is expected to settle on November 3, 2021.
Today we announced the offering of our inaugural #Citi Social Finance Bond, a $1 billion bond that will help increase access to essential services in emerging markets globally. Learn more about how Citi is expanding our commitment to social finance: https://t.co/GOnPrGjTbp
— Citi (@Citi) October 28, 2021
The Citi Social Finance Bond builds upon Citi’s expertise in inclusive finance and deepens efforts to drive positive social impact and financial innovations. The bond supports Citi’s $1 trillion commitment to sustainable finance announced earlier this year, which includes $500 billion for social finance and $500 billion for environmental finance by 2030, aligning with the agenda of the United Nations’ Sustainable Development Goals. As part of the $500 billion goal for social finance, Citi aims to expand access to essential services for 15 million households, including 10 million women, within the first few years of its 2030 commitment.
“The Citi Social Finance Bond is a great example of how we’re using our business capabilities to maximize the impact we can make as a bank, especially as we support emerging markets in their recovery from COVID-19,” said Jane Fraser, CEO of Citi. “By harnessing investor demand and leveraging our unrivaled global network, Citi is enabling others to join us in making a positive difference as we work towards our commitment to support 15 million low-income households, including 10 million women, in the communities that need it most.”
To help meet its $500 billion social finance goal, Citi is expanding the focus of its global Citi Social Finance team, which will work across Citi’s businesses globally to develop solutions that enable the bank, its clients and partners to expand financial inclusion, accelerate access to basic services, boost job creation and scale social infrastructure development.
The bond offering follows the release of the new Citi Social Finance Framework, one of the world’s first global social finance frameworks focused on enabling financial inclusion, affordable housing and access to essential services in emerging markets. The framework details how projects and assets will be selected, and Citi will report annually on the use of funds and impact. Sustainalytics, an independent provider of sustainability research, analysis and services to financial institutions globally, has reviewed the Framework and confirmed in their assessment the alignment with the transparency and reporting requirements of the ICMA Social Bond Principles 2021.
“This bond is a first-of-its-kind offering that covers an expansive portfolio of assets across a breadth of emerging markets, allowing us to strengthen our relationships with clients and investors around the world and grow Citi’s sustainable bond offering,” said Michael Verdeschi, Treasurer of Citi. “We worked exclusively with women and minority-owned broker dealers, reinforcing the firm’s commitment to advancing racial equity in the capital markets and broader financial services industry.”
These efforts follow Citi’s inaugural $2.5 billion Affordable Housing Bond issued last year, the largest-ever social bond from an issuer in the private sector, progressing key objectives of Citi’s Action for Racial Equity commitments to help close the racial wealth gap and improve economic mobility in the U.S. Through Citi’s social finance efforts in the U.S., Citi will continue to demonstrate results in providing greater access to banking and financial services and expanding affordable housing and homeownership for communities of color.
Citi has been a longstanding global leader in financial inclusion. The expansion of Citi Social Finance builds on a 15-year track record of developing new business models that leverage market-based approaches to improve the livelihoods of low-income communities in emerging markets. To date, these efforts have reached 4 million unbanked and underbanked individuals in emerging markets, 3.5 million of which are women.
For example, Citi was recently the sole coordinator on a $75 million transaction to expand access to off-grid solar energy in Kenya. The financing will support Greenlight Planet’s ambitions to reach an additional 10 million households in low-income, off-grid communities over the next five years.
“Across the globe, billions of people lack access to basic services. Citi Social Finance has a mandate to deepen our work and build new innovative partnerships with corporate clients, using our unparalleled global footprint to drive social impact with the urgency that so many low-income communities need,” said Jorge Rubio Nava, Global Head of Citi Social Finance. “Our transition to social finance builds on our leadership in financial inclusion and expands the scope of our impact to other areas, such as access to healthcare, education, clean water and agriculture, and reflects an intentional business strategy to integrate social impact into Citi’s transactions.”
Citi Social Finance is a part of Global Public Affairs’ Community Investing and Development team, which aims to enhance positive social impact and financial innovations that benefit underserved communities around the world. This includes the work of the Citi Impact Fund and the philanthropic work conducted by the Citi Foundation. Through equity investing, lending and grant making, Citi and the Citi Foundation are working in new ways to effect positive and meaningful change in communities around the world.
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With Natacha Dezert and Aman Mehta of BNP Paribas Securities Services.