Sweden’s Skandia announced it is investing SEK1bn (€98m) in a five-year social bond issue benefiting Latin American and Caribbean youth, taking up bulk of the issue, with asset manager BlackRock and other investors also participating in the private placement of the bonds.
Issued by the Inter-American Development Bank (IDB), the total SEK1.1bn bond issue aimed to finance initiatives that provided benefits in the form of strengthened local communities and better conditions for individuals, the Swedish pensions and insurance firm said.
Olof Klockhoff, portfolio manager at Skandia, said: “The investment is completely in line with Skandia’s ambition to be a role model in sustainability.”
He added that the social bond was particularly interesting as it managed targeted funds that met well-defined criteria and had clear follow-up.
Skandia said that within the group, the bonds would be distributed primarily in its life and pensions arm Skandia Liv but also in its investment funds.
The IDB said the bond was called the Education, Youth, Employment (EYE) Bond, and was the first such bond to be issued in Swedish kronor. It said the issue was fully placed with “a select few dedicated social bond investors who had expressed strong interest in the EYE bond programme in SEK-currency format”.
Laura Fan, head of funding at the IDB, said: “We are eager to continue expanding EYE bond issuances and investor partnerships are instrumental to that goal.”
Nordea was the sole lead manager of the issue, and the bond – which carries an annually payable coupon of 0.25% – was priced at 99.802%, according to IDB.
Projects under the EYE programme were designed to promote sustainable growth, poverty reduction, and social equity in Latin America and the Caribbean, according to IDB.