Esval issued the first blue bond from the private sector and the first by a water utility in the local market, for a total of 4 million UF (about US$164 million). The funds will be used to refinance financial obligations and to finance investments related to drinking water supply, resilient infrastructure, wastewater treatment, and access to basic services in the Valparaíso and Coquimbo regions, where the company operates through its subsidiary Aguas del Valle.
“In 2019, we were pioneers in issuing the first long-term green and social bond in Chile. Today, we are taking a new step with this blue bond, which will help us finance part of the investments planned for the next five years. These actions confirm the long-term commitment of our investor, the Ontario Teachers’ Pension Plan, to the country and the community,” said Esval’s CEO, José Luis Murillo.
This type of instrument covers projects related to the ocean and water resources, water and wastewater management, and/or the promotion of the sustainability of aquatic and coastal ecosystems. These categories are defined by the IFC Blue Finance Guidance, and for this issuance, Moody’s confirmed that it qualifies as a blue bond.
Operation details
The bond received a risk rating of “AA+” from Feller Rate and “AA” from ICR Chile. It was structured into two series, “Z” and “AA,” with maturities of 10 and 20 years, respectively, both with a “bullet” amortisation profile.
The “Z” series achieved a placement rate of 3.28%, 78 basis points above the reference rate, while the “AA” series achieved a placement rate of 3.48%, 93 basis points above the reference rate.
The operation was advised by Scotiabank and BCI as placement agents.
