Bank of America will issue a $2 billion equality, progress, and sustainability bond designed to advance racial equality, economic opportunity, and environmental sustainability, the first offering of its kind in the financial services industry.
The transaction also represents the first sustainability bond issued by a US bank holding company where the social portion of the use of proceeds will be dedicated to financial empowerment of Black and Hispanic-Latino communities.
The five-year bond, which is callable in four-years, will pay interest semi-annually at a fixed rate of 0.981% for the first four-years, and quarterly at a floating rate thereafter. BofA Securities was the sole bookrunner on the deal and three minority-owned broker dealers served as joint lead managers: Loop Capital Markets, Ramirez & Co., and Siebert Williams Shank.
Accelerating social equality and environmental sustainability
An amount equal to the net proceeds from the bond offering will be allocated to social and environmental purposes, helping to advance several of the United Nations (UN) Sustainable Development Goals (SDGs). The types of social projects benefiting from this offering – and any bond offering of other issuers with similar social purposes – have the potential to increase lending and investment in minority communities and businesses.
Environmental projects include financing, leasing and investments that support the transition to a low-carbon economy, focusing specifically on renewable energy and clean transportation.
Other BoA Initiatives
Just last month, Bank of American joined the Partnership for Carbon Accounting Financials, a global framework for financial institutions to measure and disclose the emissions from their lending and investment portfolios. Last week, Morgan Stanley became the first global US bank to commit to this initiative.
And in June, Bank of America announced it would partner with Duke Energy to power its headquarters and other Charlotte operations with solar energy.
Through a renewable energy sleeved-power purchase agreement (PPA), the company is participating in Duke Energy’s Green Source Advantage (GSA) program. The bank is the first company and financial institution to sign a 10-year agreement for electricity and Green-e certified renewable energy certificates (RECs) through this program.