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Unédic issued the two largest social bonds ever in the midst of the covid-19 crisis

Unédic issued its inaugural EUR4bn Social Bond (Nov-2026 OAT+36) on May 15, 2020, which represented the largest social bond ever issued worldwide for any type of issuer. On June 10th, the Agency issued its second Social Bond (Nov-2029 OAT +25) and attained another EUR 4bn matching its record size for the largest ever printed social bond.


The Social Bond Framework, fully aligned with ICMA Social Bond Principles, valorises the social missions of Unédic and emphasises its evaluation culture and capabilities as well makes its possible investors to o assess the social impact of its programs more easily, particularly in terms of social justice and redistribution.


The inaugural social issuance stole the spotlight

On Friday May 15th, Unédic, the French unemployment agency, issued an inaugural €4bn 6-year Social bond at OAT+36bps under its NeuMTN program.

Unédic took advantage of a quiet market opening after a heavy supply in recent weeks. The new social bond format stole the spotlight and the issuer was able to achieve both spread and size objectives. Tightening by 4bps from initial guidance to price at OAT + 36 bps, this new issuance finished with a limited NIP. Demand was astonishing with orderbooks finishing in excess of €7.75bn, the largest orderbook ever for the issuer. This permitted the transaction to print €4bn, making it the largest ever Social Bond worldwide. Natixis acted as sole structuring agent & Joint Bookrunner.


Unédic repeats past performance with its second social issuance

On June 10th, Unédic issued its second EUR Social benchmark bond for the funding year 2020 and its first Social bond under the long term EMTN programme. The new EUR 4 bn benchmark transaction, backed up by the explicit guarantee from the French state, was priced at OAT 25bps. Final orderbook finished in excess of EUR 8.75bn which represents the largest orderbook ever achieved by Unédic. 


Social Bond rationale

Serving as financier of social and economic buffers in France, Unedic is a social pure player. Unedic’s mission is to compensate, protect and support the employment of workers and to support companies to preserve jobs in case of economic shocks. Its mission is also to neutralize periods of job loss by contributing to supplementary pension schemes. Through its social bond framework, Unédic commits to greater transparency towards investors.  Unédic’s impact is also demonstrated by its approach in terms of evaluation, experimentation, adjustment of needs and targeting of allowances and benefits.


A Framework valorising the social missions of Unédic

Unédic’s social missions to achieve sustainable employment are distinguished in two eligible categories: providing socio-economic protection against fluctuations in the labour market and supporting French employees in returning to the job market. The bond framework complies with ICMA Social Bond Principles, and covers major programs funded by Unédic.


Covid-19 responses

Proceeds raised through the inaugural social bond issuance will primarily be used to fund covid-19 related crisis response measures rolled out by Unédic: on the one hand extending standard unemployment insurance programs, and on the other implementing an exceptional job retention scheme involving subsidized part-time working covering over 12 million private sector employees. Overall more than 15 million people are directly supported by Unédic. These measures are naturally eligible in Unédic’s social bond framework in the category “Protecting”, a case study on Covid-19 related measures is provided in the framework.  Therefore, unemployment insurance’s role as an automatic shock buffer is playing its full role in the current economic context caused by lock-down measures and economic recession. 


A granular scheme-level impact assessment feeding future reporting

Evaluation is at the heart of Unedic’s mission. Unedic has invested in hardware and software in order to be able to process large amount of data on beneficiaries (age, gender, education level, career paths,etc.) . Impact reports will be supported by an analysis of big data that help to assess and improve the efficiency of schemes. Thus, Unédic’s publications, statistics and surveys will feed future reporting.


Investors’ appetite
These transactions were partly allocated based off an investor scoring methodology that assesses ESG-integration and thematic/impact strategies of investors, thereby allowing to prioritize investors in search of clear environmental and/ or social benefits for their investments. As per this methodology, a significant amount of the transactions were allocated to sustainable investors accounting for 42.86% in the 6YR Social NEU MTN and 62.8% in the 10YR Social EMTN.


To go further

Investor presentation:

Framework Social Bond (English) :

Framework Social Bond (French) :