CIMB to issue $500mn Sustainable Development Goals Bond
Kuala Lumpur: CIMB Bank Bhd has successfully priced its USD500 million RegS/144A Sustainable Development Goals Bond on January 13, 2022. This marks the first ever RegS/144A SDG Bond to be issued by a Malaysian bank in the US markets.
The SDG bond complies with Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines issued by the International Capital Market Association. It was assessed as credible and impactful by second party opinion provider, Sustainalytics.
“The bond was well received, reflecting the accelerating global shift towards sustainable investing among a diverse investor base. Banks took up 34% of the bond while 43% was subscribed by fund managers, followed by 22% by securities firms and the remaining 1% subscribed by corporates,” the bank says in a media release.
The bond – a 5.5-year fixed rate note priced at a spread of 70 basis points above the 5-year US treasury, with a yield of 2.189%. It will be issued on 20 January 2022 under CIMB Bank’s existing USD5 Billion Global Medium Term Note Programme. Approval- in-principle has been received from the SGX-ST for the listing and quotation of the Notes on the official list of the SGX-ST. An application will be made to list the SDG Bond on Bursa Malaysia (under the Exempt Regime).
CIMB Bank will channel the SDG Bond proceeds to various eligible financing assets/projects such as affordable housing, start-ups and SMEs, public schools and hospitals, green mass transit, climate resilient buildings and infrastructure, forestry and wildlife conservation projects, as well as COVID-19 and other global pandemic financing.
Dato Abdul Rahman Ahmad, Group CEO of CIMB Group says, “The success of our bond transaction helps to further expand our fixed income investor base into the US. At the same time it supports our aim to be a catalyst for real sustainable action in ASEAN.
“As sustainability is a strategic agenda for CIMB, this bond also enables us to diversify our fundraising strategy and tap into a fast-growing pool of sustainable investment funds in the global markets. This is very much in line with our commitment to mobilise RM30 billion towards sustainable finance by 2024.”
BofA Securities, CIMB Investment Bank, JPMorgan and Standard Chartered Bank are the Joint Bookrunners for the SDG Bond. CIMB Investment Bank and BofA Securities are the Joint Arrangers for the USD5 Billion Global Medium Term Note Programme.
The SDG Bond is the latest milestone reflecting CIMB Group’s strong commitment to sustainability, one of the key pillars under the Group’s Forward23+ strategic plan. CIMB was one of 30 founding member banks to draft the United Nations Environment Programme Finance Initiative or UNEP FI Principles for Responsible Banking in 2019, and was recently the first ASEAN bank to join the Net-Zero Banking Alliance.