Environmental Finance Bond Awards judges gave a 'highly commended' recognition to Mexico for being the first country to issue a Sustainable Development Goal (SDG) aligned sovereign bond.

Mexico's SDG Sovereign Bond Framework leverages the work that the country has undergone to link the Mexican Federal Budget to the SDGs (overall, Mexico's SDG framework is linked to a total of 11 SDGs).

The SDG bond was also innovative in that geospatial eligibility criteria were applied to social projects to target only the municipalities with the highest social gaps in the country.

The United Nations Development Programme (UNDP) declared that the framework contributes to Mexico's SDGs commitment by strengthening budget transparency, aiming public spending towards sustainable programmes, and contributing to the development of the local and international capital markets aimed at development sustainable finance.

Vigeo Eiris (V.E), an affiliate of Moody's, gave a second opinion confirming that the framework of Mexico is aligned with the four core components of the Green Bond Principles and Social Bond Principles from the International Capital Markets Association (ICMA).

The €750 million ($890 million) 7-year transaction was more than six times oversubscribed with an order book of €4.8 billion, allowing Mexico to print its second lowest coupon and one of its largest order books in the Euro market. Furthermore, this bond allowed the Federal Government of Mexico to expand its investor base as 44% of the total issuance that was allocated to investors with ESG-focused investment portfolios.

One judge praised it for "promising to tackle SDGs not only for the Mexican citizens, but also for global investors through SDG bonds."

Gabriel Yorio González, Mexico´s deputy finance minister, said "this bond is a way to demonstrate our commitment to the 2030 Agenda, focusing on Mexico's efforts to address climate change and to reduce the country's social and economic inequalities."