DBS Says Breaks Fresh Ground, Prices $500 Million "Green" Bond

Tom Burroughes

20 July 2017

has priced the issue of $500 million floating-rate “green” bonds (maturing in 2022), coming at a time of increased interest in finance linked to causes such as reducing pollution and cutting carbon dioxide emmissions.

The five-year bonds, DBS said, carry a quarterly coupon of three-month dollar LIBOR plus 0.62 per cent. Bonds are expected to be issued on 25 July, it said in a statement yesterday. The issuance is part of the Singapore-headquartered bank’s $30 billion Global Medium Term Note Programme.

The first green assets are expected to include the DBS Group’s financing of Marina Bay Financial Centre Tower 3, a commercial property in Singapore which is certified “Green Mark Platinum” by the Building and Construction Authority.

“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 chief financial officer Chng Sok Hui said.

Launch of such a bond comes at a time when interest in environment-linked investments is growing. In March this year, for example, BlackRock launched a Green Bond Index fund; this is a UCITS vehicle offering exposure to fixed income securities used to fund projects of various kinds. In June, IT giant Apple reportedly raised over $1 billion for a 10-year green bond. Green bond issuance is at a record, with $45 billion issued so far in 2017, compared with $31 billion in 2016 over the same period. (Source: Financial Times, citing Dealogic data, 14 June, 2017.)

DBS has mandated DBS Bank as the sole structuring agent and Crédit Agricole Corporate and Investment Bank, HSBC, ING, Natixis Securities Americas, Société Générale and Wells Fargo as joint lead managers and bookrunners, and ABN AMRO as joint lead manager for the issuance of the bonds. The Bonds have been offered to certain non-US investors outside the US.

DBS added that the bonds are expected to be rated Aa2 by Moody's Investors Services and AA- by Fitch Ratings.