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CASE STUDY: Bancolombia Prints First Green Bond Issued by LatAm Private Lender

Bancolombia’s green bond was the first green bond issued by a private financial institution in Latin America and the first green bond in Colombia, potentially opening the market to a slew of local currency-denominated issuances.

Mar 13, 2017 // 1:19PM

Deal At A Glance

Deal Type: Green Bond

Governing Law: Colombian Law

Borrower: Bancolombia S.A.

Bookrunners: Banca de Inversion Bancolombia  Corporación  Financiera S.A.

Legal Adviser to Borrower: Gómez-Pinzón Zuleta

Legal Adviser to Lenders: Gómez-Pinzón Zuleta

Size: COP350mn (approx. US$115mn)

Tenor: 7 years

Coupon: IBR+220bp

Price: 100%

Date of Issue: December 2016

Use of Proceeds: To finance projects that help address climate change goals in Colombia.


In Q4 2016, Bancolombia, the largest commercial bank in Colombia, sought to secure fresh capital to help finance renewable energy and sustainability projects that would help the bank and the country meet increasingly stringent climate change targets.

The bank engaged with the IFC, the private sector arm of the World Bank, and in December became the first Colombian private sector entity to place a green bond in the country’s markets.

Transaction Breakdown

On 5 December 2016, Bancolombia sold the COP305mn (approx.US$115mn) 7-year unlisted notes at par, paying a coupon of IBR+220bp.

Bancolombia adhered to the Green Bond Principles in structuring the bond. The 2023 notes were issued in Colombia’s Segundo Mercado, and sold entirely to the IFC.

The bullet bond will allow the bank to diversify its sources of funding while showing its strong commitment to sustainable finance. Bancolombia will use the proceeds from the sale of the bond to expand its financial services for the private sector and encourage investments that help to address climate change, following its commitment to reduce its environmental footprint.

The move could make way for other issuers to tap into sustainability-focused pockets of liquidity. It was also well- timed. The country’s Financial Management Committee SICLIMA of Colombia and the Climate Bonds Initiative is currently developing a Colombian Strategy Framework for Climate Funding, which could form part of the government’s plan to create a market for sustainable finance, and help it achieve its climate change goals.

The strategy, an outline of which is due to be released in April 2017, aims to see the development and adoption of an efficient market for green bonds in Colombia.

Americas Andes Latin America

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