US-based financial institution OneMain Financial issued its inaugural $750 million social bond to provide a portfolio of social loans to disadvantaged customers in credit-insecure or credit-at-risk areas of the country.

The bond will be used to finance or re-finance, in part or in full, a portfolio of new or existing loans that meet the eligibility criteria of OneMain's Social Bond Framework, and will be fully allocated within a year of issuance. The loans will look to address the unequal access to credit in the US, and in many cases will refinance high-interest debt and cushion the financial blow of unexpected events.

OneMain also confirms that at least 75% of the loans funded by the Social Bond will be allocated to women or minority borrowers.

"Our approach to this bond issuance was a natural extension of how we operate our business," said Micah Conrad, chief financial officer at OneMain Financial. "We embrace our role as the leader in offering nonprime customers access to responsible credit. Many of these customers have limited access to credit and live in underserved communities."

In addition, OneMain provides services such as free financial education workshops and employing loan specialists who work with borrowers to help ensure they can successfully repay the loans.

S&P provided an external review of the bond and concluded it is aligned with the four components of the International Capital Market Association's (ICMA) Social Bond Principles.

The transaction is an example of a wider trend in US capital markets to embed social projects in environmental, social and governance (ESG) frameworks.