IDB Invest Partners with Home Mortgage Bank and RBC Caribbean for the First Social Bond in the Caribbean
- This is the first social bond issued in Trinidad and Tobago and the Caribbean region and will support mortgage financing to low- and middle-income families
IDB Invest joined forces with Home Mortgage Bank (HMB) and RBC Caribbean in its subscription for the first social bond in Trinidad and Tobago and the Caribbean region. The TTD300 million senior secured social bond issuance with a tenor of 5 years was fully subscribed by IDB Invest. HMB obtained an independent verification of the methodological framework, known as a second-party opinion (SPO), issued by Standard and Poor’s.
The proceeds of the bond will be used to finance the purchase of mortgages in the secondary market. All mortgages purchased by HMB must be originated under the Government of Trinidad and Tobago’s interest rate subsidy programs and must be granted to low- and middle-income families.
“At IDB Invest, we are proud to further our relationship with Home Mortgage Bank, where on this occasion we have executed the first social bond in the country. Our partnership with Home Mortgage Bank and RBC Caribbean further increases access to housing financing for lower and middle-income families and individuals in Trinidad and Tobago,” said James Scriven, CEO of IDB Invest. “Thanks to this financing, we once again reaffirm our commitment to promote sustainable development in the region.”
Acting CEO of HMB, Brent McFee, commented: “The social bond is a landmark deal and a first within the Caribbean. I am confident of the numerous socio-economic benefits it will provide contributing by extension to the development of Trinidad and Tobago. It’s indeed a pleasure to partner with the team at IDB Invest to undertake another groundbreaking venture.”
“RBC is pleased once again to partner with IDB Invest in its ongoing sustainable development efforts. In keeping with our purpose to help clients thrive and communities prosper, this initiative supports five United Nations Sustainable Development Goals and the partnership with HMB facilitates the provision of affordable home ownership where it is critically needed,” said Darryl White, CEO of RBC Financial Caribbean Ltd. “We recognize the importance of considering long-term value creation and sustainability in financing and lending, as it aligns with RBC’s ESG principles. As such, we are proud to support the work the IDB and HMB are doing with this focus.”
The social bond offers an opportunity to extend the duration of financing available to HMB at similar rates in the domestic financial services market, and secured by a pool of mortgages rather than investment securities. Likewise, the financing will contribute to developing the capital market and thematic bonds issuances in Trinidad and Tobago and in the region.
IDB Invest is also providing technical assistance services to HMB to help develop its sustainable finance strategy and its Environmental and Social Management System. The advisory services project will also conduct a market study for green housing finance to identify demand and supply opportunities in the market, and support HMB in rolling out green financing lines.
Additionally, as part of the bond issuance process, IDB Invest advised HMB on the design of the methodological framework for the use of funds of the social bond, which contains the criteria for the selection, monitoring and evaluation of projects, aligned with the principles of social bonds of the International Capital Market Association (ICMA).
This deal is expected to contribute to five United Nations Sustainable Development Goals (SDGs): No Poverty (SDG 1), Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10), Sustainable Cities and Communities (SDG 11), and Climate Action (SDG 13).
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $15.3 billion in asset management and 375 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Home Mortgage Bank
HMB is locally rated A by CariCRIS. Established in 1985, HMB is a regulated, systemically important, non-bank financial institution, supervised by the Central Bank of the Republic of Trinidad and Tobago. It is the only privately-managed mortgage institution specifically established by an Act of Parliament in the legislature to facilitate the creation of a secondary mortgage market in the country and provide market liquidity through the purchase of mortgages from primary mortgage market financial institutions in Trinidad and Tobago. HMB is also regulated by the Trinidad and Tobago Securities and Exchange Commission, the securities regulator of the country, which governs its debt-raising capabilities in the domestic capital markets, the review of its collective investment schemes, and the continuous disclosure of its management and audited financials to the investing public in Trinidad and Tobago.
About RBC Financial Caribbean Limited
With more than 100 years of dedicated service to the Caribbean, RBC has a presence in 17 countries across the Caribbean, serving nearly one million clients. As one of the Caribbean’s leading diversified financial services companies, RBC provides personal and commercial banking, wealth management, corporate and investment banking, insurance and trust and asset management services to a range of clients, including individuals, small businesses, general commercial entities, regional and multi-national corporations and governments.