DBS launched its debut green bond and the first such international issue from Singapore yesterday (Tuesday), a $500m (EUR429m, SGD681m) five year floating rate note that the issuer said delivered “very compelling” pricing after investors placed some $900m of orders for the paper.
DBS Group Holdings – the highest rated bond issuing Asian financial institution, at Aa2/AA- by Moody’s/Fitch – was able to tighten pricing on the 144A/Reg S issue some 20bp, from initial price guidance of the three month Libor plus low 80s area to a final price of plus 62bp.
“We are pleased to be the first financial institution in Singapore to issue a green bond,” said DBS CFO Chng Sok Hui. “The launch of our green bond amplifies our commitment to sustainability and to supporting projects which have a positive impact.
“It adds another dimension to efforts to green our operations, and lends support to the transition to a low-carbon economy.”
DBS’s green bond framework adheres to the Green Bond Principles and has a second party opinion from Sustainalytics. Eligible categories include green buildings, sustainable transportation, renewable energy, energy efficiency, waste management and climate change adaptation – with proceeds eligible to finance assets in these categories or companies that derive 90% of more of their revenues from them. DBS may also use proceeds to fund its own operations with respect to renewable energy, energy efficiency and waste management.
“DBS Green Bond Framework is transparent and provides clarity regarding the use of proceeds,” concluded Sustainalytics. “DBS’s responsible business operations and investments contribute to transformational SDGs (sustainable development goals) in Singapore and the region, creating positive environmental and social impacts.”
Marina Bay Financial Centre Tower 3 (pictured), in which DBS has offices, is expected to be among the first assets in the green portfolio, certified Green Mark Platinum by the Building & Construction Authority of Singapore.
DBS was green structuring agent and global coordinator for the green bond, while Crédit Agricole, HSBC, ING, Natixis, Société Générale and Wells Fargo were joint bookrunners, and ABN Amro joint lead.
US investors were allocated 41% of the issue, Asia 37% and Europe 22%. Funds and asset managers took 47%, banks 30%, central banks and agencies 9%, insurers and pension funds 6%, corporates 6%, and banks, private banks and others 2%.
Photo credit: Erwin Soo/Wikimedia Commons