The Singapore Government announced today that it has raised $2.4 billion (US$1.75 billion) in its inaugural green bond offering, kicking off a multi-year program aimed at raising up to S$35 billion to fund the country’s sustainable transition strategy.
The offering of the August 2022 bonds was met with strong demand, with the S$2.4 billion raised at the top-end of the targeted issuance range, substantially above the S$1.5 billion minimum size announced earlier this week. The bond’s 3.4% yield represented an 11 bp tightening from the initial price guidance at the beginning of the book building, and the offering was more than 2x oversubscribed, with an order book exceeding $5.3 billion.
At a 50-year tenor, the offering marks the longest-dated issuance to date for a sovereign green bond.
Leong Sing Chiong, Deputy Managing Director at the Monetary Authority of Singapore (MAS), said:
“The successful launch of Singapore’s inaugural sovereign green bond marks an important milestone in our sustainability journey. The strong orderbook affirms investors’ confidence in the Government’s plans to build green infrastructure for a financially and environmentally sustainable future.”
The issuance follows the publication in June of the government’s Green Bond Framework outlining eligible categories for investment from green bond proceeds, which include renewable energy, energy efficiency, green building, clean transportation, sustainable water and wastewater management, pollution prevention, control and circular economy, climate change adaptation, and biodiversity conservation and sustainable management of natural resources and land use.
The government has stated that it is aiming to issue up to S$35 billion of sovereign and public sector green bonds by 2030, with proceeds used to finance expenditures and investments supporting the country’s recently launched Singapore Green Plan 2030. Singapore has committed to reaching peak emissions around 2030, and has recently announced an acceleration of its ambition to reach net zero emissions by around mid-century.
Chiong said:
“MAS will continue to support the pipeline of green sovereign bonds, as well as the broader development of green finance as an enabler of global efforts to mitigate climate change.”
MAS announced that S2.35 billion of the green bond was placed with institutional and accredited investors, and the remaining S$50 million will be offered to individual investors.
Bookrunners on the deal include DBS Bank, Deutsche Bank, HSBC, OCBC, and Standard Chartered Bank.
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