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Green Finance / Treasury & Capital Markets
Singapore issues S$2.5 billion green bonds
Strong demand from investors led by insurers triggers tighter pricing
The Asset 22 May 2024

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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