A carefully timed return to the international capital markets, combined with a clear social mandate and robust execution, sees Caixa Econômica Federal’s $700 million social bond — which wins the award for Financial Institutions Sustainable Deal of the Year — stand out as one of the region’s most compelling sustainable finance transactions.
The deal is significant on multiple levels. It marks Caixa’s first international bond issuance in more than a decade, establishes a new US dollar benchmark for one of Brazil’s most systemically important state-owned lenders, and introduces Latin America’s first Social Inclusion Bond aimed squarely at expanding access to microcredit. Executed against a backdrop of heightened global volatility, the transaction demonstrates that well-structured sustainable finance from high-quality issuers can still command deep and diversified demand.
Caixa priced the five-year senior unsecured notes in May, paying a yield of 5.875%, equivalent to a spread of roughly forty to forty-five basis points over the Brazilian sovereign curve. The outcome places the bond broadly in line with implied fair value levels for comparable Brazilian bank risk, despite the issuer’s long absence from international markets and the dedicated social use of proceeds.
Initially launched with guidance in the low six percent range and a targeted size of $500 million, the transaction rapidly gathered momentum. Investor demand peaked at approximately $3.5 billion, more than seven times the original size, allowing Caixa to upsize the deal to $700 million while tightening pricing materially. The final orderbook stood at close to $2.9 billion, with roughly one hundred and fifty institutional accounts participating, reflecting strong, high-quality demand across regions.
“The market understands that the goal of the transaction is to support micro companies and to provide microcredit to individuals, and it reacts very well,” says Carlos Antônio Vieira Fernandes, Caixa’s chief executive.
The bond was issued under Caixa’s newly established Global Medium Term Note program and executed pursuant to Rule 144A and Regulation S, providing access to a broad global investor base spanning North America, Europe, Latin America, the Middle East and Asia. Documentation combined Brazilian and New York law, reflecting a dual-jurisdictional structure designed to meet international capital markets standards while remaining consistent with the bank’s domestic regulatory framework.
Designated as a Social Inclusion Bond, the notes sit within Caixa’s Sustainable Finance Framework, aligned with international best practice and the ICMA Social Bond Principles. Proceeds will be allocated to the financing and refinancing of eligible social projects, with a particular emphasis on financial inclusion and microcredit for individuals and small businesses — a segment where access to affordable funding remains a structural constraint in Brazil.
“Brazil is still developing its microcredit market, and one of the issues that we face is the cost of raising money for it,” Fernandes says. “We have developed a model, which proves to be very successful, to allocate resources to microcredit.”
Caixa’s microcredit program is already operating at scale. The bank has closed around twenty-five thousand transactions, predominantly in the north and center-west regions of the country, with a focus on family agriculture and the circular economy. The budget allocated to the program has surpassed R$1 billion, and the new bond issuance will enable Caixa to channel the equivalent of roughly R$4 billion into further lending.
Preparation for the transaction took several months and included extensive investor engagement. “It is very satisfying for us to notice that the market is paying attention to this kind of issuance and is ready to participate,” Fernandes says.
Beyond the immediate funding, the transaction reopens access to international capital markets, establishes a new reference point on Caixa’s US dollar credit curve, and embeds sustainable finance into its long-term funding strategy. By aligning a benchmark-sized transaction with measurable social outcomes, the bank positions itself as an issuer capable of marrying scale, governance and impact — a combination increasingly demanded by global investors.
For international investors, the bond provides a clear reference point; for Latin America’s sustainable finance market, it sets a benchmark for how social bonds can achieve scale, depth and pricing efficiency even in challenging conditions.
Caixa Econômica Federal $700 million 5.625% five-year senior unsecured social inclusion notes due 2030
Lenders: BNP Paribas; Citi; Santander; UBS
Counsel to Issuer: Demarest; Hogan Lovells
Counsel to Underwriters: Cescon Barrieu; Simpson Thacher