Mexican microfinance lender Banco Compartamos plans to raise up to MXN5 billion ($266.3 million) in what will be its largest social bond issue to date, according to Moody’s.
The bank intends to price a 3.5 year-note over the TIIE Fondeo interbank lending rate, and a seven-year bond at a fixed rate, the ratings agency said Friday in a report. The TIIE Fondeo was 7.77% as of August 15, according to central bank data.
Compartamos initially aims to raise MXN4 billion but could add a further MXN1 billion depending on demand, with the proceeds going to finance its portfolio, future growth and to pay down debt.
The social bond has second-party opinion from Sustainalytics, said Moody’s, which assigned the bonds a AA.mx rating, it said.
The deal represents Compartamos’ second social bond sale of the year, following a MXN2 billion sale in June.
Meanwhile, Mexican chemical company Cydsa is preparing to sell up to MXN1 billion worth of seven-year bonds, with the proceeds going to repay debt, Moody’s said in a separate report.