Santander Chile issues first green bond under its ESG Framework to finance green mortgages

Rhea-AI Summary

Banco Santander Chile has announced its first green bond under its ESG Framework to finance green mortgages. The bond was privately placed with a Japanese investor for JPY 8,000 million ($53 million) and will be used to refinance or finance new green mortgage operations. The portfolio of green mortgages is expected to continue growing in the coming years.

Positive

• Banco Santander Chile has issued its first green bond, which could positively impact its stock price. The bond, worth JPY 8,000 million ($53 million), will be used to finance green mortgages and is expected to help the bank expand its portfolio of green mortgages in the future.

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• None.

SANTIAGO, Chile, Oct. 26, 2023 (GLOBE NEWSWIRE) -- Banco Santander Chile's (NYSE: BSAC) announced its first green bond under its ESG Framework to finance green mortgages.

Santander Chile placed its first green bond under its ESG Framework incorporating ESG (Environmental, Social and Governance) criteria, focusing on the green mortgage product. The instrument was placed privately to a Japanese investor with the advice of Daiwa Securities Capital Markets, for an amount of JPY 8,000 million, equivalent to US$ 53 million, for a term of two years and with a rate of 0.845%. The objective of the transaction is to refinance or finance new green mortgage operations, a product delivered by the Bank for the purchase of homes, based on energy efficiency certifications existing in the industry, and that benefits clients with a preferential rate. This is the first green bond with use of funds for green mortgages in the country.

This portfolio has an approximate size of Ch$ 86 billion and is expected to continue growing in the coming years as there are also more units that have energy efficiency certification. There are currently 58 real estate projects that have environmental certifications that meet the requirements established in the ESG Framework. Most of these projects have CEV certification, promoted by the Ministry of Housing and Urban Planning, between A+ and B.

Additionally, Santander makes a contribution to NGOs that seek to conserve the biodiversity of Chilean ecosystems that are part of the “Huella Program”. In this way, the product aligns with the purpose of helping customers move towards a greener economy and supporting the protection of the country's biodiversity.

For Román Blanco, CEO and Country Head of Santander, “looking for concrete ways that contribute to the fight against climate change is one of Santander's great objectives. It is a global commitment that characterizes us, aware that we must continue to advance towards increasingly responsible management of our business, in harmony with the protection of our planet and the sustainable development of the communities where we are present." The executive also maintained that "the interest shown by investors reflects that these types of alternatives are increasingly in demand, so we hope that it will be an instrument that continues to expand both locally and internationally."

Also, Soledad Ramírez, Manager of Santander's Sustainable Finance and Climate Change Office, pointed out that “traveling along the path of responsible banking implies being innovative and demanding when it comes to finding new forms of financing that contribute to the transition towards a greener economy. In this context, having an ESG Framework gives us the necessary criteria that we must consider for this type of operations.”

About Banco Santander
Banco Santander Chile is the largest bank in the Chilean market in terms of loans and assets. As of June 30, 2023, we had total assets of Ch$ 68,681,981 million (U.S.$ 85,752 million), outstanding loans (including interbank loans) at amortized cost, net of allowances for loan losses of Ch$ 38,149 million (U.S.$ 47,783 million), total deposits of Ch$ 28,164,399 million (U.S.$ 35,164 million) and shareholders’ equity of Ch$ 4,168,518 million (U.S.$ 5,205 million). The BIS capital ratio as of June 30, 2023, was 17.5%, with a core capital ratio of 11.0%. As of June 30, 2023 Santander Chile employed 9,162 people and has 260 branches throughout Chile. Banco Santander Chile is one of the companies with the highest risk classifications in Latin America with an A2 rating from Moody's, A- from Standard and Poor's, A+ from Japan Credit Rating Agency, AA- from HR Ratings and A from KBRA, all have a Stable Outlook.

CONTACT INFORMATION
Cristian Vicuña
Chief Strategy Officer and Head of Investor Relations
Banco Santander Chile
Bandera 140, Floor 20
Santiago, Chile
Email: irelations@santander.cl
Website: www.santander.cl 

FAQ

What is Banco Santander Chile's first green bond for?

The green bond is being used to finance green mortgages.

How much is the green bond worth?

The green bond is worth JPY 8,000 million ($53 million).

What is the objective of the transaction?

The objective is to refinance or finance new green mortgage operations.

What is the expected growth of the green mortgage portfolio?

The green mortgage portfolio is expected to continue growing in the coming years.