Bpifrance Financement, a development agency that provides financing support to small- and medium-sized enterprises (SMEs), has issued France's first coronavirus response bond. Proceeds from the €1.5bn 7-year bond will be allocated towards alleviating the social and economic impact of the pandemic on French companies. It is Bpifrance's inaugural bond issued under its new Covid-19 Response Bond Framework, which BNP Paribas' sustainable finance teams jointly structured.
Bpifrance has become the first French issuer to launch a Covid-19 response bond, whose proceeds will be used to support companies.
|The World Health Organisation estimates over 125,000 confirmed coronavirus cases in France as of 30 April 2020. With many businesses and SMEs closed because of lockdown measures to contain the virus, Covid-19 response bonds can be a useful and transparent tool to direct capital to provide financial support to help firms tackle the negative effects of the economic shock.
In tackling the Covid-19 pandemic fallout, investors, governments and other public-sector development agencies are turning to sustainable finance in the form of coronavirus response bonds to address immediate pressing social and economic challenges.
Bpifrance's Covid-19 Response Bond Framework outlines how the bond will finance 'Prêt Atout' and 'Prêt Rebond' loans, which assist companies affected by the pandemic through cash flow management, operations and employee support. The framework also specifically targets preserving employment to reduce the social consequences of the coronavirus crisis.
Moreover, the Bpifrance Covid-19 response bond addresses the United Nations Sustainable Development Goals, namely SDG 8 (Decent Work & Economic Growth) and SDG 9 (Industry, Innovation & Infrastructure).
"Covid-19 has shed light on other aspects of ESG, especially the social lens," says Delphine Queniart, Global Head of Sustainable Finance & Solutions at BNP Paribas Global Markets. "There's been a general strengthening of investor engagement to mobilise on Covid responses."
The bond garnered an order book totalling €3.4 billion, underlining institutional investors' increasing interest in social bond frameworks to support the coronavirus crisis response, and sustainability bonds more generally.