The FINANCIAL — Morgan Stanley (NYSE: MS) announced the issuance of a $1 billion social bond to support affordable housing projects, the latest step in the Firm’s ongoing strategy to advance market-based solutions to address sustainability challenges. This issuance follows the inaugural green bond issued by Morgan Stanley in 2015, which supported various renewable energy and energy efficiency projects.
Morgan Stanley intends to allocate an amount equal to the net proceeds of the social bond to affordable housing projects, which aim to provide housing at affordable rates to low- or moderate-income individuals and/or families in the United States.
“As the COVID-19 pandemic has unduly burdened many of our most vulnerable communities, affordable housing for individuals and families has never been more critical,” said Morgan Stanley Treasurer John Ryan. “The proceeds from this offering will help deliver and preserve housing solutions across the United States, and empower investors to make a positive social impact.”
Morgan Stanley’s inaugural social bond is part of the Firm’s decade-long leadership in sustainable finance, which includes the Morgan Stanley Institute for Sustainable Investing, established in 2013 to accelerate the mainstream adoption of sustainable investing. The Firm also has a track record of issuing and supporting innovative bonds that raise capital for positive environmental and societal impact. In 2013, the Firm helped support the first ever corporate green bond and in 2017, the Firm priced the first public market bond deal for a community development financial institution (CDFI) to help advance economic opportunity in underserved neighborhoods around the United States.
“Morgan Stanley has a long standing commitment to harnessing the capital markets to strengthen communities and create opportunity,” said Tom Nides, Managing Director and Vice Chairman of Morgan Stanley. “Financial innovations like the Morgan Stanley Social Bond are an important part of the solution to bring capital at scale to address critical challenges, including the growing need for affordable housing in our communities.”
Morgan Stanley’s Social Bond Framework, designed in-line with the International Capital Market Association’s Social Bond Principles, 2020, outlines the process through which the projects are selected, with the aim of helping to ensure that the Morgan Stanley social bond operates with high levels of transparency and disclosure. Morgan Stanley appointed an independent second-party opinion provider to review the Social Bond Framework and this social bond. Project updates and impact-focused reporting for this issuance will be made available on a dedicated website.