The Singapore government returned to the Singapore dollar bond market on May 21 with another issuance of green bonds amounting to S$2.5 billion (US$1.85 billion). This is Singapore’s third offering of sovereign green bonds, labelled as Green Singapore Government Securities (Infrastructure), following its debut issuance of S$2.4 billion with a tenor of 50 years in August 2022.
The latest green securities are for 30 years, which were priced at S$99.053 with a coupon of 3.25% to offer a yield of 3.30%. This was 16bp tighter than the initial price guidance of 3.46% area on the back of a strong demand amounting to S$6 billion from 67 investors. The offering included a S$50 million in aggregate principal amount set aside for public subscription.
Comparatively, the inaugural green bonds were priced at S$98.976 with a coupon of 3% to offer a yield of 3.04%.
Insurance companies were the biggest buyers of the bonds as they accounted for 53%, followed by fund managers, central banks and other investors at 32% and banks at 15%.
DBS acted as the sole green structuring adviser and sole retail coordinator for the transaction as well as a joint bookrunner along with Citi, HSBC, Standard Chartered and UOB. Sustainalytics provided the second-party opinion.
Commenting on the transaction, Clifford Lee, global head of investment banking at DBS, says significant capital and a range of financing instruments are required for Asia to decarbonize while enabling sustainable economic growth. “Singapore is well-placed to accelerate the development of ESG financing to support this transition. This is evidenced by a strong track record of ESG-linked issuances from its public and private sectors, which have been meaningfully oversubscribed,” he adds.
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