LuxSE, CEB Mark €10bn of Social Inclusion Bonds

On Monday 16 September 2024, the Council of Europe Development Bank (CEB) celebrated passing €10 billion in Social Inclusion Bonds at a ceremony at the Luxembourg Stock Exchange (LuxSE), where the bonds are listed.

In the presence of Luxembourg's Minister of Finance, Gilles Roth, CEB Governor Carlo Monticelli visited LuxSE for the first time on Monday to celebrate this milestone in the bank's contribution to creating social impact through sustainable finance.

With the social development bank's latest Social Inclusion Bond issuance in April 2024 (its largest ever syndicated Social Inclusion Bond of €1.25 billion), the CEB has raised a total of more than €10 billion through its Social Inclusion Bonds since 2017. As reported by LuxSE, these bonds have helped support vulnerable communities, fostered social cohesion across Europe and acted as a first responder in large-scale social crises.

All the bank's social bonds were listed on LuxSE and displayed on the Luxembourg Green Exchange (LGX), the world’s leading platform for sustainable securities.

Minister Roth commented: "Achieving the cumulative issuance of €10 billion in social inclusion bonds is a fantastic milestone that highlights the CEB's commitment to sustainable growth. By focusing on the social dimension, we ensure that progress leaves no one behind. Pursuing efforts in social finance allows us to harness the power of finance to build a better, more equal future for all. The Luxembourg Stock Exchange's role as a key partner and listing location for these social bonds is a wonderful demonstration of the platform’s capabilities."

LuxSE noted that the CEB was one of the early issuers of social bonds and has shaped the social bond market as an active issuer, but also as a founder of the International Capital Market Association's social bond working group, which led to the establishment of the industry-leading standard for social bonds, the Social Bond Principles in 2017.

Initially, the Paris-based social development bank issued its Social Inclusion Bonds exclusively in EUR. Since 2020, the bank has issued social bonds in multiple currencies, including USD, SEK, NOK, AUD and CAD, thereby expanding the appeal of the social bond market and responding to the needs of a diversified investor community, added LuxSE.

"We embarked on this extraordinary journey nearly a decade ago, and over the years our Social Inclusion Bonds have become a hallmark of the CEB on the international capital markets. Today, I am delighted to celebrate our €10 billion milestone at the Luxembourg Stock Exchange, which has been a dedicated and loyal partner of the CEB every step of the way," said Governor Monticelli.

In the early days of its social bond issuance journey, the CEB focused on three categories of social impact, namely education, social housing and MSME lending. When the COVID-19 pandemic hit in 2020, the CEB added another social category to its list: health. Today, the Social Inclusion Bonds represent more than 40% of the CEB’s annual funding.

LuxSE recalled that the initial focus of sustainable finance was on contributing positively to different environmental goals and help accelerate the green transition. The social dimension came to the fore in 2020, when governments and companies alike raised funding to address the far-reaching social and societal fallout from the COVID-19 pandemic.

"We are proud to serve as the reference exchange for the Council of Europe Development Bank's Social Inclusion Bonds. The CEB is one of our leading issuers in the social bond sphere and we applaud the bank's pivotal role in propelling the social aspect of sustainable finance and contributing to a fair and just transition. By leveraging capital market financing, the CEB has significantly improved the lives of vulnerable communities throughout Europe," noted Julie Becker, CEO of LuxSE.

LuxSE also recalled that LGX started as a platform for green bonds in 2016. In response to market developments, LuxSE increased the scope of instruments to include social and sustainability bonds the following year. One of the first social bonds displayed on the social bond window of LGX was the first Social Inclusion Bond issued by CEB.

The relationship between CEB and LuxSE precedes the Social Inclusion Bonds, and dates back to 1985, when the first bond issued by the CEB was listed on LuxSE. Today, there are around 50 outstanding bonds issued by the CEB listed on LuxSE, totalling €30 billion, which includes fourteen Social Inclusion Bonds.