© Reuters. Customers use ATMs at Citibank New York branch
By Imani Moise
(Reuters) – Citigroup Inc (NYSE 🙂 said Thursday it has issued the private sector’s largest social bond for affordable housing, as part of a more than $ 1 billion initiative announced earlier this year to fight racial inequality.
The operation, consisting of an issue of variable and fixed rate notes of $ 2.5 billion over 4 years and 3 years, comes on top of a sharp increase in social bond announcements made during the coronavirus pandemic.
“This transaction represents an important next step in expanding Citi’s commitment to ensuring that all families have access to safe and affordable housing,” said Chief Executive Officer Mike Corbat.
Citi, America’s third-largest bank, unveiled its $ 1 billion initiative to support communities of color over the summer, including a significant effort to increase homeownership among racial minorities.
The bank partnered with women, veterans and minority-owned businesses to execute the transaction.
Social bonds, a type of debt that channels the proceeds of specific socially beneficial projects, have become more popular this year as interest in ethical investments has increased during the global COVID-19 pandemic.
Debt issuance has climbed to $ 85 billion this year so far, from $ 10.6 billion in the same period of 2019, according to data from Refinitiv.
Bank of America (NYSE 🙂 issued a $ 1 billion bond in May, the proceeds of which will be loaned to nonprofit hospitals, nursing homes, and healthcare equipment manufacturers.
It separately issued a $ 2 billion sustainability bond, aimed at providing more affordable funding to Black and Hispanic-Latin American communities.
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