Caixa Econômica Federal, Brazil's wholly state-owned lender, priced USD 700 million of five-year senior unsecured social bonds on 8 May 2025, its first international bond issuance in more than a decade.
The notes, due 2030, carry a 5.625% coupon and were priced at a yield of 5.875%, equivalent to a spread of roughly 40 to 45 basis points over the Brazilian sovereign curve. The deal was launched with initial price guidance in the low 6% range and a target size of USD 500 million.
DEMAND ALLOWS UPSIZING
Investor demand peaked at about USD 3.5 billion, more than seven times the original size, allowing Caixa to increase the deal to USD 700 million and tighten pricing. The final order book stood at close to USD 2.9 billion, with around 150 institutional accounts participating.
The bonds were issued under Caixa's Global Medium Term Note programme, under Rule 144A and Regulation S, giving access to investors across North America, Europe, Latin America, the Middle East and Asia. BNP Paribas, Citi, Santander and UBS led the transaction. Demarest and Hogan Lovells advised Caixa, while Cescon Barrieu and Simpson Thacher advised the underwriters. Documentation combined Brazilian and New York law.
PROCEEDS FOR MICROCREDIT
The notes were designated as a Social Inclusion Bond under Caixa's Sustainable Finance Framework, which is aligned with the International Capital Market Association's Social Bond Principles. Proceeds are to be allocated to the financing and refinancing of eligible social projects, with an emphasis on financial inclusion and microcredit for individuals and small businesses.
The issue established a new US dollar benchmark for Caixa, which had been absent from international debt markets for more than ten years.