04/08/22

SINGAPORE: Jurisdiction Joins Green-Bond Bonanza With $1.7 Billion Sale.

As published on bloomberg.com, Thursday 4 August, 2022.

Singapore is raising S$2.4 billion ($1.7 billion) via its first green bond, choosing a 50-year tenor as it joins countries from South Korea to Egypt looking to fund the battle against climate change.

The debt maturing in 2072 priced with a yield of 3.04%, according to the Monetary Authority of Singapore. That’s an 11 basis-point tightening compared with the start of the marketing process. More than S$5.3 billion of orders were received, it said in an emailed statement Thursday.

The sale marks not only the country’s first foray into green debt, but also its first time choosing the ultra-long maturity, which it issued via syndicate.

“The extension of the sovereign yield curve to 50 years will further develop the Singapore dollar bond market and support longer-tenor corporate issuances,” MAS Deputy Managing Director Leong Sing Chiong said in the statement.

The country is a relative latecomer to the booming global market for sustainable debt. Europe is the dominant region for issuance, and fellow Asian financial hub Hong Kong raised HK$20 billion ($2.5 billion) via its first green bond for retail investors earlier this year.

The institutional placement size of S$2.35 billion was at the top end of expectations, the MAS said. Members of the public can buy the remaining S$50 million worth of notes.

Keen to position itself as an environmental-finance hub, the city state is already encouraging sustainable issuance with a program to fund sustainability certification of companies’ bonds and loans. Still, its local-currency green debt market is smaller than that of fellow Asian financial hub Hong Kong, Bloomberg data show.

“Singapore is an international financial center, and just like Hong Kong, Singapore knows that the green element is important,” said Tamami Ota, head of sustainable-finance research unit at Daiwa Institute of Research Ltd.

Singapore’s debut green issuance will fund the expansion of its electric rail network. It is part of the government’s plan to raise as much as S$35 billion of environment-focused financing by 2030. Officials have already set out standards for sustainable investments, defining what actually qualifies as a green.

The bookrunners for the deal were DBS Bank Ltd., Deutsche Bank AG Singapore Branch, The Hongkong and Shanghai Banking Corporation Ltd. Singapore Branch, Oversea-Chinese Banking Corporation Ltd., and Standard Chartered Bank (Singapore) Ltd.