Mexico’s Ministry of Finance and Public Credit announced the issuance of a series of sustainable bonds, raising €4.75 billion aimed at financing projects aligned with a broad range of the UN Sustainable Development Goals (SDGs).

The transaction, which included 5-year (€2 billion), 10-year (€1.75 billion) and 14-year (€1 billion) sustainable benchmark notes marks the largest ESG-labelled bond issuance by a Latin American issuer, as well as the largest ESG-labelled EUR transaction by a non-European sovereign, according to Crédit Agricole CIB, the joint bookrunner on the offering.

The offering follows the recent update of Mexico’s Sovereign Framework for Sustainable Financing, which expanded the categories of eligible sustainable expenditures. The new framework enables expenditures aligned with 13 SDGs, expanding the prior framework with the addition of SDG 10 (Reduced Inequalities) and SDG 12 (Responsible Consumption). Other SDG categories covered by the framework include SDG 2 (Zero Hunger), SDG 3 (Good Health and Well-Being), SDG 4 (Quality Education), SDG 6 (Clean Water and Sanitation), SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate Action), SDG 14 (Life Below Water) and SDG 15 (Life on Land).

The updated framework also strengthened eligibility and traceability criteria for sustainable bond offerings, including through the incorporation of the Mexican Sustainable Taxonomy, launched in 2023, as an analytical framework for assessing eligible sustainable expenditures.

Mexico has emerged as a significant issuer of sustainable bonds, with its first offering of bonds linked to the UN SDGs in 2020, and issuances to date of 56 bonds denominated in euros, dollars, pesos, and yen, for a cumulative amount of more than $32 billion.

Demand for the new offering was strong, with an order book reaching €13.5 billion, and orders from more than 180 international investors. In a statement announcing the issuance, the Ministry of Finance and Public Credit said:

“This result demonstrates the strong appetite of global investors for instruments issued by the Government of Mexico, even in a complex geopolitical context.”