Citigroup, Santander and Scotiabank were lead managers on the Republic of Chile's CLP1.6 trillion ($2.1 billion) social bonds issued in November.

The bonds were notable for being the largest single sovereign social bond issue last year – ahead of deals by Guatemala ($500 million) and Ecuador ($327 million), and the first ESG bond issued in local currency by Chile out of their sustainable bond framework published earlier that month.

Almost half (48%) of Chile's 'social' notes were purchased by foreign investors. The notes were issued in November in two tranches with maturities of eight years (CLP1 trillion, 2.5% yield) and 13 years (CLP560 billion, 3.4% yield) respectively.

Chile's sustainable bond framework identified eligible use of proceeds for the bond in the following categories:

• support for the elderly or people with special needs from vulnerable sectors;
• support for low-income families;
• support for human rights victims;
• community support through job creation;
• access to basic housing;
• access to education;
• food security;
• access to essential health services; and
• programmes designed to prevent and/or alleviate unemployment derived from socioeconomic crises. These programmes include the Government's economic plan to respond to Covid-19.

Chile also issued two green bonds in 2020, worth a combined $3.8 billion, according to Environmental Finance's bond database.

Jose Ramos Lobo, director of Citigroup's Latin American Credit Markets Group, said: "This landmark transaction represented the second Citi-led offering for the Republic of Chile since June 2019, when they became the first sovereign in the Americas to issue green bonds. Ever since, Chile has continuously strengthened its position at the forefront of sustainable finance, and Citi has been a key partner to the Republic in those endeavors."

Stephen Guthrie, senior vice president, wholesale banking at Scotiabank Chile, said: “It is a privilege for Scotiabank to support the Republic of Chile’s sustainable finance program designed to fund the country’s ambitious and progressive sustainability objectives.

“The rapid success of this sustainable finance program demonstrates strong leadership to the market and serves as a roadmap to inspire future issuance in the region and around the world.”