Tuesday, May 19, 2020 4:01 pm EDT
Bank of America announced today the issuance of a $1 billion corporate social bond to support the fight against the COVID-19 pandemic, the first such offering by a U.S. commercial bank.
The four-year bond, which is callable in three years, will pay interest semi-annually at a fixed rate of 1.486% for the first three years, and will pay interest quarterly at a floating rate thereafter. This offering is the seventh environmental, social and governance (ESG)-themed bond issued by Bank of America since 2013. Previous offerings – including five “green” bonds and one “social” bond – have focused on providing clean energy and supporting affordable housing and community development financial institutions (CDFIs), respectively.
The proceeds from this offering will be allocated to health care industry lending in the firm’s Global Commercial Bank, specifically not-for-profit hospitals, skilled nursing facilities, and manufacturers of health care equipment and supplies.
“The world is in a fight against COVID-19 and we are committed to doing our part by supporting the companies and professionals who are on the front lines,” said Bank of America Vice Chairman Anne Finucane. “The proceeds from this offering will help deliver critical resources for the companies involved in the testing, diagnosis, treatment and prevention of this insidious virus, while providing investors an opportunity to join us in this all-important effort.”
Leading the innovation and development in Sustainable Finance
“Bank of America has played a critical role in the development of green, social and sustainability bonds,” said Tom Montag, chief operating officer of Bank of America, and president of Global Banking and Markets. “We were the first company to issue a benchmark-sized corporate green bond and we co-authored the original version of the Green Bond Principles, a voluntary set of guidelines to promote integrity in the development of the green bond market. Since 2013, we have issued nearly $8 billion in green and social bonds, and helped more than 150 clients support their sustainable business needs by raising in excess of $200 billion through more than 300 ESG-themed bond offerings.”
Finucane and Montag co-chair Bank of America’s Sustainable Markets Committee, which collaborates across business lines to deliver innovative financing solutions in support of the United Nations Sustainable Development Goals (SDG), including affordable housing, sustainable energy, clean water and sanitation, education and health care. This bond offering is designed to support the U.N.’s SDG 3 focused on Good Health and Well-Being.
Bank of America continues to support the communities in which our clients live and work. The company recently announced a $100 million commitment to philanthropic support for local communities to purchase medical supplies, food and other priorities, in addition to the $250 million provided by the company each year. The company also pledged $250 million in capital and $10 million in philanthropic grants to CDFIs to help support low- and moderate-income communities.
