BBVA and the food company Colombina structured the first derivative linked to the sustainability of the local financial market. These are two IRS (Interest Rate Swap) tied to sustainable indicators for a total amount of $65,000 million.
(This is the agreement to create sustainability reporting standards).
This product allows clients to manage interest rate risk. In addition, the rate paid by the company is subject to compliance with a sustainability indicator.
“At BBVA we are committed to accompanying our clients in adopting more sustainable practices and promoting more socially and environmentally responsible development. With this first derivative contract in Colombia linked to sustainability, we are not only meeting this objective, but also innovating in the market for sustainable investment instruments and helping Colombina in meeting its environmental objectives”, said the executive president of BBVA in Colombia, Mario Pardo Bayona.
The IRS closed with Colombina, allows this food producing company to manage the interest rate risk. In the IRS linked to sustainability, the rate paid by the company is subject to compliance with an ESG indicator (environmental, social and corporate governance practices) in such a way that meeting the proposed goals of environmental protection means a financial benefit for the company.
(Colombia leads in sustainability among Latin countries).
The total amount of the two IRS linked to sustainability is 65,000 million pesos. Both have a maturity date of September 2025. Among the benefits that the company has is not only interest rate risk management, but it can also link this product with its sustainability programs and thus enhance the financial effects on the balance.
For César Caicedo, president of Colombina, “By contracting an IRS derivative with the BBVA bank, we continue to make sustainability our roadmap. Being pioneers in these financing products shows our commitment and effort in the fight against climate change. Colombina will continue to consolidate itself as one of the food companies with the best sustainability practices in the world.”
(They present a model of ‘green’ development activities in Colombia).
This new financial option is available to all those companies that have sustainability programs within their corporate strategy and need to cover their balance sheet risk at an interest rate through an IRS or at an exchange rate and interest rate through Cross Currency Swaps.
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