Fitch Ratings Assigned AAA Rating to Icetex’s Social Bond Program

New York-based ratings agency Fitch Ratings announced that it has assigned a long-term national rating of ‘AAA(col)’ to the Program for the Issuance and Placement of Ordinary Social Bonds charged to a global quota of up to COP2 billion from the Colombian Institute of Educational Credit and Technical Studies Abroad (Icetex).

The AAA rating of this program, which is the highest issued for Colombian entities, is tied to its wider AAA rating for Icetex and based largely on expected backing from the government “if required” due to the “important role of the entity as an instrument for the promotion of higher education in Colombia.”

In a note to investors, the big three ratings agency added that “the issuance program consists of several series and will be issued on a dematerialized basis in the main market of the Colombian Stock Exchange (BVC) in multiple subseries at variable and fixed rates denominated in Colombian pesos or in units of real value (UVR) and for terms between one year and 15 years, as determined in the respective Notice of Public Offering.”

Overall, Fitch Ratings stated that the “should be made in low-risk, high-liquidity financial instruments.”

“The proceeds of the placement will be aligned with the Social Bond Principles (PBS) of the International Capital Market Association and may be allocated one hundred percent (100%) to the financing by Icetex of eligible social projects that meet the eligibility criteria defined in the Information Prospectus, either through new disbursements and/or the replacement of liabilities acquired for the financing of eligible populations. On a temporary basis, the proceeds from the placement of the issue may be invested while its destination materializes. The investment should be made in low-risk, high-liquidity financial instruments.”

(Photo credit: Icetex)