Bank of America has issued a US$2bn sustainability bond that will be used to help reduce inequalities for Black and Hispanic communities in the US.

BofA says the bond proceeds will be used towards, “eligible social assets that seek to help reduce inequalities for Black and Hispanic communities in the United States and eligible green assets that promote a transition to a low-carbon economy”.

Funds will go towards mortgage lending and construction loans for affordable housing projects in Black and Hispanic communities under the Community Reinvestment Act, according to an SEC filing. Eligible social projects also include financing for medical professionals looking to establish practices in Black and Hispanic communities, supply chain finance facilities to businesses identified as minority-owned business enterprises, and deposits/equity investments in minority depository institutions with a commitment to maintain the deposits for a minimum period of three years.

The US$2bn 0.981% five-year non-call four-year fixed-to-float senior unsecured note is priced at 72bp over Treasuries.