HSBC inaugurates SDG programme with $1bn HoldCo deal

HSBC Holdings inaugurated a new Sustainable Development Goal (SDG) bond framework on Wednesday that aligns with seven of the UN targets, selling a $1bn six year non-call five HoldCo deal.

The deal followed a roadshow and comes after HSBC last week made five sustainability pledges, including to provide $100bn in sustainable financing and investment by 2025.

“For more than a decade, HSBC has helped clients break new ground in the green bond markets in Europe and Asia, and to finance some of the biggest climate-friendly infrastructure projects in the world,” said group chief executive Stuart Gulliver on Monday of last week (6 November).

“The $100 billion commitment that we are announcing today acknowledges the scale of the challenge in making a transition to a low-carbon future. We are committed to being a leading global partner to the public and private sectors as they make that transition.”

The seven SDGs the programme is aligned with are: SDG3, good health and well-being; SDG4, quality education; SDG 6, clean water and sanitation; SDG 7, affordable and clean energy; SDG9, industry, innovation and infrastructure; SDG11, sustainable cities and communities; and SDG13, climate action.

“As part of our legacy as a strong corporate citizen, HSBC recognizes the catalysing role it can play through its lending activities and operations towards the achievement of the SDGs,” the bank said. “The HSBC SDG bond framework is a step towards highlighting this impact, and mobilising investors to contribute capital towards the significant investments needed to accomplish the 17 goals.”

The programme is aligned with the Green Bond Principles and Social Bond Principles, and as such meets the Sustainability Bond Guidelines, as held by ICMA. Sustainalytics confirmed alignment with these, and provided a second party opinion.

HSBC structured and led the new issue for HSBC Holdings, which is TLAC-eligible, pricing the $1bn (EUR850m) six year non-call five Reg S deal, rated A2/A, at 100bp over mid-swaps, following initial price thoughts of 110bp-115bp over. A banker away from the deal said that the deal offered a new issue premium of around 9bp.

HSBC entered the green bond market in November 2015, with a EUR500m five year green bond out of HSBC France.

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