CHARLOTTE, N.C.–(BUSINESS WIRE)–Bank of America announced today the issuance of a $2 billion Equality Progress Sustainability Bond designed to advance racial equality, economic opportunity and environmental sustainability, the first offering of its kind in the financial services industry.
The transaction also represents the first sustainability bond issued by a U.S. bank holding company where the social portion of the use of proceeds will be dedicated to financial empowerment of Black and Hispanic-Latino communities.
This is Bank of America’s eighth environmental, social and governance (ESG)-themed corporate bond, bringing the firm’s aggregate total of issuance to $9.85 billon.
“Our focus on sustainable finance is one of the ways we drive responsible growth. By addressing these critically important issues through ESG-themed securities, we are offering a way for fixed income investors to be part of social and environmental change, and drive solutions through the debt capital markets,” said Anne Finucane, vice chairman at Bank of America, who leads the company’s ESG, sustainable finance, capital deployment and public policy efforts. “Our communities and the environment are inextricably linked, and Bank of America cares deeply about both and continues to explore innovative ways to enable investors to use their investments to help address these societal challenges.”
The five-year bond, which is callable in four-years, will pay interest semi-annually at a fixed rate of 0.981% for the first four-years, and quarterly at a floating rate thereafter. BofA Securities was the sole bookrunner on the deal and three minority-owned broker dealers served as joint lead managers – Loop Capital Markets, Ramirez & Co., Inc. and Siebert Williams Shank.
“Bank of America is proud to build upon its long-standing commitment to our communities through ESG and sustainable finance initiatives. This innovative offering aims to support progress toward racial equality and environmental sustainability by leveraging the company’s extensive capabilities and committed local engagement,” said Tom Montag, chief operating officer at Bank of America. “We believe this offering will inspire other issuers and mobilize additional capital to address these critical issues.”
Helping to accelerate social and societal equality and environmental sustainability
An amount equal to the net proceeds from the bond offering will be allocated to social and environmental purposes, helping to advance several of the United Nations (UN) Sustainable Development Goals (SDGs). The types of social projects benefiting from this offering – and any bond offering of other issuers with similar social purposes – have the potential to increase lending and investment in minority communities and businesses.
Financing and investment for social purposes that seek to help…