IDB Invest and Banco Promerica of Costa Rica join forces to issue sustainable bonds in Panama
- The issuance will be the first of its kind in Central America
- The bond program will support small and medium-sized enterprises and green projects in Costa Rica
IDB Invest, a member of the IDB Group, provided Banco Promerica of Costa Rica S.A., a partial credit guarantee facility (PCG) of up to $20 million. This facility will guarantee one or more green, social and sustainable bond issuances in the Panama stock market under the bond program, which will help improve access to financing for small and medium-sized enterprises (SME) and expand their portfolio of green credit in Costa Rica.
The first issuance under the $50 million bond program, authorized by the Superintendency of the Securities Market of Panama, will be a sustainable bond for $10 million that will have a PCG from IDB Invest of 30 percent of the principal amount issued and in circulation. This issuance will be placed in the Panamanian market through MMG Bank, co-structuring agent and brokerage firm for the bond program.
The projects financed by this first issuance are expected to have a positive impact on the SME and green finance segment in Costa Rica. According to the Ministry of Economy, Industry and Commerce of Costa Rica, approximately 93 percent of the country's companies are classified as SME, and of that percentage, 67 percent are considered micro-enterprises, 25 percent are small companies and 8 percent medium-sized companies.
The deal will also contribute to strengthening capital markets and thematic bonds in Panama and Costa Rica, consolidating Banco Promerica of Costa Rica as an issuer generating high social and environmental impact, and contributing to its sustainable development. This sustainable bond issuance carried out on the Panama Stock Exchange will be the first of its kind in Central America.
During the structuring of the bond program, IDB Invest provided advisory services to Banco Promerica of Costa Rica to support learning about the methods and best practices to promote and commercialize the products of the green credit portfolio, as well as support preparations for its scheduled issuance of sustainable bonds.
As part of these services, IDB Invest advised Banco Promerica of Costa Rica in the methodological framework design for the use of funds, which contains the criteria for selection, monitoring and evaluation of projects, aligned with the principles of green and social bonds of the International Capital Markets Association (ICMA). Additionally, IDB Invest supported Banco Promerica of Costa Rica in obtaining an independent verification of the methodological framework, known as a second-party opinion, issued by Vigeo Eiris, an external consultancy specialized in this type of project.
This operation can potentially contribute to nine Sustainable Development Goals (SDGs) of the United Nations: Gender Equality (SDG 5), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Reduced Inequalities (SDG 10), Sustainable Cities and Communities (SDG 11), Responsible Consumption and Production (SDG 12) and Climate Action (SDG 13) and Life on Land (SDG 15).
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $13.1 billion in asset management and 385 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Promerica Costa Rica
Banco Promerica of Costa Rica is the fourth largest private financial institution in the country. Banco Promerica has incorporated into its strategy supporting the United Nations Sustainable Development Goals (SDGs), through the financing of SME, green loans, agribusiness and middle-class mortgages. In addition, it was the first Costa Rican bank to sign the United Nations Principles for Responsible Banking. Although BPCR carries out its activities in Costa Rica, it is also part of Grupo Promerica, a financial group with a regional presence in 9 countries.
About Grupo Promerica
At Grupo Promerica we believe that all the people and companies in our communities should exceed their limits to achieve the success they deserve, for this reason, for 29 years we have promoted a bank that develops relationships and offers products and services in 9 countries: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Ecuador, Cayman Islands and the Dominican Republic.