Wells Fargo’s newest bond focuses on inclusion, climate

Wells Fargo announced Wednesday the issuance of an Inclusive Communities and Climate Bond, its first Sustainability Bond, which will fund projects and programs that support housing affordability, socioeconomic opportunity and renewable energy.

“Wells Fargo’s first Sustainability Bond is intentionally designed to support job creation and human and health services in minority communities, housing affordability for low-to-moderate income individuals and families and the development of renewable energy resources,” said Bill Daley, vice chairman of public affairs at Wells Fargo. “The focus on capital investment in moderate- and low-income, predominantly minority areas, and our partnership with diverse firms in the offering of this Sustainability Bond underscores Wells Fargo’s commitment to supporting historically marginalized communities, which have been some of the hardest hit by COVID-19 and the impacts of climate change.”

“We are honored to play such a significant role in Wells Fargo’s inaugural Sustainability Bond,” said Chris Williams, chairman of Siebert Williams Shank &Co., LLC. “Wells Fargo’s decision to mandate diverse firms as joint bookrunners with full participation in the investor book building and allocation process is a first among U.S. money center banks and underscores Wells Fargo’s commitment to social inclusion for all dimensions of this financing.”

The transaction priced on May 12, 2021. Unless redeemed, the notes will pay interest semi-annually at a fixed rate of 0.805% until May 19, 2024 and then pay quarterly interest based on Compounded SOFR + 0.51% until the stated maturity date of May 19, 2025.

Wells Fargo’s Sustainability Bond Framework is available on the company website. Sustainalytics has reviewed the framework and issued a second party opinion, which found it to be “credible and impactful” and aligned with the Sustainability Bond Guidelines 2018, Green Bond Principles 2018 and Social Bond Principles 2020.

Through the Inclusive Communities and Climate Bond, Wells Fargo aims to deliver impact on housing affordability, with increased quantity, quality and overall affordability of multifamily housing properties for low- to moderate-income populations; on socioeconomic advancement and empowerment, with improved employment opportunities, education and health care outcomes and community development in majority minority census-tract areas through investment in for-profit and nonprofit enterprises located in or otherwise serving these communities; and on renewable energy, with increased global renewable energy generation capacity, resulting from investments in large-scale on- and off-shore wind, solar and geothermal projects and related equipment manufacturing.

“This transaction represents an important next step in delivering on Wells Fargo’s commitment to expand our sustainable finance capabilities in support of an inclusive economic recovery and an equitable transition to a low-carbon future,” said Wells Fargo Corporate Treasurer Neal Blinde. “Wells Fargo is pleased to be able to contribute to the strong momentum we’re seeing in the sustainability bond market, and help meet the growing demand for investment opportunities that deliver positive social and environmental outcomes.”

In March 2021, Wells Fargo announced its goal to reach net-zero greenhouse gas emissions by 2050, including financed emissions, and to deploy an additional $500 billion in financing to sustainable businesses and projects between 2021 and 2030.

The company deployed approximately $157 billion in sustainable finance between 2012 and 2020.