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Singapore launches S$2.4 billion inaugural sovereign green bond

Marina Bay Sands building over infinity pool.

The Monetary Authority of Singapore (MAS)  said that it has raised S$2.4 billion ($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. It follows the launch of Singapore’s Green Bond Framework launched in June 2022.

What: Singapore has raised $1.75 billion in its first green bond

Why it matters: The bond kicks off a multi-year green bond programme, with the longest sovereign bond tenure to date

What’s next: Growing central bank focus on green finance, long term funding for Singapore’s Green Plan 2030 and a shift towards sustainable development planning

Singapore Sovereign Green Bond

S$2.35 billion of the 50-year bond (the “Aug-72 bond”) was placed with institutional and accredited investors.

The remaining S$50 million of the bond will be offered to individual investors, who may submit their applications from 9:00am on 5 August to 12:00 noon on 10 August 2022.

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.

Singapore’s Green future

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.

MAS has been making a series of announcements about ESG regulation, green finance, fintech and more, all in support of its long term transition to a sustainable framework as a country.  All the proceeds from its green bond issuances must adhere to its Green Bond guidelines and can be used for projects in renewable energy, energy efficiency, preventing pollution and climate change adaptation.

Current plans for use of proceeds from the bonds, known as Green SGS (Infra),  will be used to finance expenditure in support of the Singapore Green Plan 2030, including transportation for the Jurong Region and the Cross Island lines.

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 at the beginning of August. The bonds were placed with a diverse mix of high-quality institutions.

DBS Bank Ltd. (DBS), Deutsche Bank AG Singapore Branch (DB), The Hongkong and Shanghai Banking Corporation Limited Singapore Branch (HSBC), Oversea-Chinese Banking Corporation Limited (OCBC), and Standard Chartered Bank (Singapore) Limited (SCB) were the bookrunners for the transaction.

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