Caja Rural de Navarra is preparing to sell an inaugural sustainable cédulas, the proceeds of which will be allocated to environmental and community projects, having today (Monday) mandated for a European roadshow that will commence on Friday, with the deal expected later in November.

Banco Cooperativo Español, Barclays, BBVA, Crédit Agricole and DZ have been mandated by the Spanish cooperative bank’s first sustainable covered bond issue, which will have an intermediate maturity. The roadshow will run from Friday until Thursday of next week (10 November).

A syndicate banker at one of the leads said the deal will likely be sold later this month, although he noted that a number of headline events – including central bank meetings and the US election on Tuesday of next week (8 November) – have the potential to disrupt the market before the end of the roadshow.

“We will reassess the market after those risk events and see where we stand,” he said.

The Spanish issuer said the proceeds of the bonds will be allocated to projects focused on environmental sustainability and creating a social impact in local communities. The deal is expected to be rated Aa2 by Moody’s.

Spain’s Kutxabank sold the first and to date only non-German covered bond in the field of socially responsible investment (SRI) in September 2015, a Eu1bn September 2025 issue that was backed by social housing loans. MünchenerHyp sold a Eu300m inaugural ESG (environmental, social, governance) Pfandbrief in September 2014 and Berlin Hyp a Eu500m Green Pfandbrief in April 2015.

Bank of China last Monday (24 October) announced plans for what it is calling a green covered bond.

Caja Rural de Navarra’s last cédulas benchmark was a Eu500m March 2022 issue sold in March of last year.