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ISA Interchile’s green bond recognized as the best sustainable financial operation of 2021

ISA Interchile’s green bond recognized as the best sustainable financial operation of 2021

“Deals of the Year Awards 2021” by LatinFinance:

  • The prestigious finance magazine distinguished ISA’s subsidiary with the “ESG Deal of the Year” award after issuing its first green project bond for USD 1.2 billion to refinance commitments related to the Cardones-Polpaico Transmission Line, key to decarbonizing Chile’s energy grid..

Santiago, February 8, 2022. – The electric transmission company ISA Interchile was distinguished by the prestigious international publication LatinFinance in its “Deals of the Year Awards 2021,” with the ESG Deal of the Year award – or best sustainable financial operation – for the issuance of its first green project bond for USD 1.2 billion for a term of 35 years.

The instrument issued by ISA Interchile aims to refinance the debt commitments acquired during the construction phase of the 2×500 kV Cardones-Polpaico Transmission Line, an infrastructure that opened the doors to the Grid Decarbonization Plan to contribute to the mitigation of the climate change.

“We are very happy to receive this prestigious recognition for our company, as it puts us in a very good position within the capital markets and investors, highlighting the confidence we generate internationally regarding sustainable energy development in Chile,” highlighted Gabriel Melguizo, general manager of ISA Interchile.

This transaction constituted the largest issuance of green bonds for a project in the electrical sector in Latin America, at the same time obtaining the lowest financing cost in dollars of any corporate project bond in the region and being the longest-term in dollars.

The company’s Finance Manager, Aquiles Vargas, explained that “the issuance of this green project bond is a historic milestone for ISA Interchile due to three fundamental aspects: its ESG certification, which is of utmost importance in the current context of Climate Change; its magnitude, surpassing one billion dollars; and its high rating awarded by the main credit rating agencies.”

It should be noted that the distinction obtained by the energy company debuts in this edition of the LatinFinance awards and recognizes the best sustainable financial operation of the year, associated with Environmental, Social and Governance (ESG) criteria.

International experience

ISA and its companies have been pioneers in the placement of this type of bonds in the region. To date, they have issued green bonds for a value of over USD 2.5 million. ISA CTEEP, the company’s subsidiary in Brazil, was the first company in the transmission segment to issue green bonds for BRL 621 million. Likewise, the subsidiary Consorcio Transmantaro in Peru was the first to issue green bonds in the international capital market for USD 400 million, while in Colombia, ISA issued green bonds in 2020 for COP 300,000 million, generating an oversubscription of 2.54 times and becoming the first green bond issuance by a real sector company in the public securities market of Colombia.

Carolina Botero, Vice President of Corporate Finance at ISA, explains that “In all our green bond issuances, we have exceeded our expectations for amount and rate. The success achieved demonstrates our strength and the market’s confidence in ISA and its companies. Likewise, it reaffirms our commitment to decarbonizing the economy in the region by financing green, environmentally responsible projects through which renewable energies are transported.”

ISA Interchile’s green bond was listed on the Singapore Exchange Securities and received a long-term BBB+ rating from Fitch Ratings, while Moody’s gave it a Baa1 rating.