CFC Closed $400 Million, 10-Year Sustainability Bond in 2020

CFC announced the successful issuance of its inaugural Sustainability Bond in October 2020. The $400 million capital market debt transaction has a 10-year term, maturing on March 15, 2031, and an annual coupon of 1.35 percent.

“This new bond demonstrates CFC’s and its member cooperatives’ commitment to the communities they serve, which is a core principle of our business model,” CFC CEO Sheldon Petersen said. “CFC has pioneered financial solutions for electric cooperatives since our inception 51 years ago, and we are proud to have launched the first sustainability bond issue by the electric cooperative network.”

CFC Sustainability Bond Proceeds to Finance Member Environmental and Social-Economic Projects

Sustainability Bonds are bonds where the proceeds are used to finance or refinance projects that bring clear environmental and social-economic benefits. CFC’s bond proceeds will be used to finance members’ projects that provide access to essential services, primarily broadband services, for underserved and rural populations and to finance renewable energy projects.

“CFC has been diligently working on its options to issue a bond that would be classified as an Environmental, Social and Governance (ESG) bond,” CFC CFO J. Andrew Don explained. “There have been numerous Green Bonds, with proceeds designated for renewable or environmentally designated purposes, and Social Bonds, with proceeds to fund issues that provide a social good. CFC chose to blend the two into a Sustainability Bond so the proceeds could be used for either social benefit or renewable projects.”

Sustainability Bond Framework Aligned with ESG Market Standards

CFC has published its Sustainability Bond Framework on its website. In addition, an independent second party opinion on the Sustainability Bond Framework and its alignment with relevant ESG market standards was provided by Sustainalytics, a provider of ESG research and analysis.

“CFC’s Sustainability Bond is a win-win for CFC, our members and their communities,” Don said. “The bond is the lowest coupon ever issued by any utility company in the sustainability market environment.”

Published Oct. 15, 2020, in CFC Solutions News Bulletin.