Singapore offers up to S$2.4 billion of 50-year sovereign green bonds in inaugural offering
Of which, S$50 million will be offered to the public in Singapore through electronic applications.
File photo of the Monetary Authority of Singapore building in Shenton Way. (Photo: CNA/Jeremy Long)
SINGAPORE: Singapore will be offering between S$1.9 billion and S$2.4 billion of 50-year sovereign green bonds, according to a public notice put out by the Monetary Authority of Singapore (MAS) on Thursday (Aug 4).
Called the Green Singapore Government Securities (Infrastructure) or Green SGS (Infra), the bonds will be the country’s inaugural issuance of sovereign green debt.
With a maturity date of Aug 1, 2072, this is also the first time the Government is issuing 50-year bonds. Existing SGS bonds have maturities ranging from two to 30 years.
The price and yield of the bond will be determined via a bookbuilding process by the end of Thursday.
Up to S$2.35 billion is offered via a placement to institutional and other investors, while S$50 million will be set aside for retail investors in Singapore.
MAS, in its notice, said it reserves the right to decide on the final issuance amount and “may at its sole discretion” reallocate the aggregate principal amount of bonds offered between the placement and public offer.
The Green SGS (Infra) is part of the pipeline of up to S$35 billion of sovereign and public sector green bonds that the Government and its statutory boards will issue by 2030.
As part of the Singapore Green Bond framework published in June, proceeds from green bond issuances must adhere to guidelines and can be used for projects such as renewable energy, energy efficiency, preventing pollution and climate change adaptation.
Proceeds from the Green SGS (Infra) will be used to finance expenditures in support of the Singapore Green Plan 2030, including the Jurong Region Line and the Cross Island Line.
This is also the first time that MAS is issuing a bond via syndication, which involves the appointment of a group of banks – known as bookrunners – to jointly market and distribute a bond. In this case, the bookrunners appointed are DBS Bank, Deutsche Bank, HSBC, OCBC Bank and Standard Chartered Bank.
So far, SGS bonds have been issued via auctions.
The syndication method “enhances the Government’s ability to issue across varied market conditions”, MAS said in a media release earlier this week, citing how issuance parameters such as tenor and size are set on the day the bond is priced.
Following the publish of the public notice, the bond’s institutional bookbuilding will commence.
After the bond has been priced in the institutional market, MAS will announce the yield and price for the public offer for retail investors likely at the end of the day.
Retail investors will then be able to apply for the bonds via application channels, such as ATMs and online banking platforms, provided by DBS, OCBC and UOB, from 9am on Aug 5 to 12pm on Aug 10.
