NEA raises $1.65 billion from maiden green bond

SINGAPORE (THE BUSINESS TIMES) – The National Environment Agency (NEA) has raised $1.65 billion worth of green bonds in a dual-tranche issuance after pricing the first and second series of its $3 billion multi-currency medium-term note (MTN) programme the night before.

This marks NEA’s longest tenor green bond denominated in Singapore dollars to date as well as the longest tenor unrated public green bond in South-east Asia, said DBS Bank in a statement on Tuesday (Sept 7). It also marks the largest inaugural bond issuance by a Singapore statutory board.

DBS is the sole arranger for NEA’s multi-currency MTN programme and adviser for the agency’s green bond framework.

The issuance comprised $350 million in 10-year fixed-rate notes with a coupon rate of 1.67 per cent, as well as $1.3 billion in 30-year fixed-rate notes with a coupon rate of 2.5 per cent. Interest on both series is payable semi-annually in arrears.

Based on data provided by DBS, the combined final order books stood in excess of $2 billion from mostly asset managers and agencies (90 per cent), followed by banks (9 per cent) and private banks (1 per cent).

Some 98 per cent of demand came from Singapore.

DBS global head of fixed income, Mr Clifford Lee, noted that the “confident and robust” take-up of the green bonds indicates that the market is “ready to throw its support behind Singapore’s sustainable development plans”.

“Investors are also signalling that sustainable infrastructure development will give Singapore a competitive advantage and are willing to invest in industry initiatives that bring long-term gains,” said Mr Lee.

“The strength of this issuance is a watershed moment as it demonstrates that investors will respond positively when there is a trusted standard for issuers and investors to rely on, in this case the NEA Green Bond Framework. This in turn will contribute towards Singapore’s ambitions of becoming the green finance capital of Asia and the world,” he added.

The latest round of funds raised by NEA will go into financing the agency’s development of sustainable waste management infrastructure – starting with the Tuas Nexus Integrated Waste Management Facility, Singapore’s first integrated facility to treat incinerable waste, source-segregated food waste and dewatered sludge.

NEA chief executive Luke Goh said he expects the facility to significantly boost Singapore’s resource management capabilities upon its completion.

“The strong reception to the public sector’s first green bond affirms investors’ confidence in Singapore’s sustainable development efforts. We are encouraged by the strong market demand and range of investors that subscribed to NEA’s green bonds,” commented Mr Goh.

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