January 27, 2023
- This is the first B Bond structured by IDB Invest to be issued under a 144A/ Regulation S format
- This is the largest B Bond issued by a Costa Rican telecommunications company
- The bond proceeds will help to expand 4G coverage to narrow the digital divide
IDB Invest and Liberty Costa Rica announced the international issuance of a Sustainability-Linked Bond (SLB) as part of a $450 million financing package to increase digital access and broadband quality in Costa Rica. This is the largest Bond B structured by IDB Invest to date.
The proceeds will be used to finance investments in fiber-to-the-home, increase capabilities and speeds of the HFC network, capital expenditures related to 4G/5G infrastructure, refinance certain financial obligations, working capital and general corporate purposes.
The deal has been financed through a $50 million A loan funded by IDB Invest through its balance sheet and a $400 million B Bond funded through the issuance of a sustainability-linked bond in the international debt capital markets in accordance with Rule 144A and Regulation S under the U.S. Securities Act of 1933. Securities Act of 1933. Citibank served as lead left bookrunner, while Bank of America and Scotiabank served as joint bookrunners on the issue.
“With this innovative structure, IDB Invest will be able to mobilize a greater number of institutional investors who, otherwise, could not participate in our deal under the A/B loan structures and private placements of B bonds,” said Gema Sacristán, IDB Invest Chief Investment Officer.
Liberty Costa Rica CFO, Maarten Hekking, commented: “With the launch of our inaugural Sustainability-Linked Bond, we are one step further on our ESG journey and have materially extended our debt maturities. This bond will help accelerate digital infrastructure development in the market and drive us forward towards creating a more sustainable future here in Costa Rica.”
IDB Invest will also provide additional advice to Liberty Costa Rica to establish a roadmap for climate change mitigation actions. The Costa Rican entity, for its part and in line with the Sustainability Strategy, commits to Sustainability Performance Goals (SPTs) to cover a reduction of more than 30% in direct and indirect emissions and a reduction of more than 35% in the intensity of GHG emissions per operating unit.
The second opinion was issued by Moody’s ESG Solutions, which accredits its alignment with the Sustainability-Linked Bond Principles of the International Capital Market Association (ICMA).
This agreement is expected to contribute to three of the United Nations Sustainable Development Goals: Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Partnerships for the Goals (SDG 17).