CIMB to issue US$680-million SDG Bond, the first in international capital markets by an ASEAN Issuer
30 September 2019
Also first in the Formosa market, CIMB’s SDG Bond to fund projects related to UN’s Sustainable Development Goals
Kuala Lumpur: CIMB Bank Berhad (”CIMB Bank” or “CIMB”) recently successfully priced its US$680-million Formosa & Reg S Sustainable Development Goals Bond (“SDG Bond”). CIMB’s SDG Bond marks the first ever SDG Bond to be issued by a Malaysian and ASEAN issuer in the Reg S international capital markets, and also the first to be issued in the Formosa market. The SDG bond is aligned with the global best practices and benchmark for Sustainability Bond principles, including the Social Bond Principles, Sustainability Bond Guidelines 2018 and the ASEAN Sustainability Bond Standards.
The SDG bond was well received, reflecting the trend in global sustainable investing assets, which surged to US$30 trillion in 2018. Banks took up more than 76% of the SDG Bond, with the rest subscribed by securities firms and fund managers. The SDG Bond – a five-year floating rate note priced at a spread of 78 basis points above US$ 3 months LIBOR – will be issued on 9 October 2019 under CIMB Bank’s existing US$5 Billion Euro Medium Term Note Programme. Applications will be made to list the SDG Bond on Bursa Malaysia (Exempt Regime), SGX-ST, and the Taipei Exchange.
Tengku Dato’ Sri Zafrul Aziz, Group CEO of CIMB Group said, “We are pleased with the success of this maiden SDG Bond transaction, as we aim to be a catalyst for real action and visible shaper of sustainability practices in ASEAN. The business case for sustainability makes perfect sense: to close the gap in sustainable development and infrastructure, the world needs around US$2.5 trillion, two thirds of which is estimated to be provided by banks. In other words, there is a huge opportunity out there and CIMB is well positioned to capture these opportunities.”
Cathay United Bank, SG Securities (HK) Limited, Taipei Branch and Standard Chartered Bank Taiwan Ltd are the Joint Bookrunners, while CIMB Investment Bank Berhad is the Programme Arranger & Coordinator for the SDG Bond.
The SDG Bond is yet another aspect of CIMB Group’s commitment to Sustainability, one of the key pillars of CIMB Group’s growth strategy, Forward23. In accordance with its SDG Bond Framework, CIMB Bank will channel the SDG Bonds proceeds to various impactful sectors that support seven UN SDGs specifically chosen by CIMB Group, namely Decent Work and Economic Growth; Industry, Innovation & Infrastructure; Reduced Inequalities; Responsible Consumption & Production; Climate Action; Life on Land and Peace, Justice & Strong Institutions.
CIMB is also the only banking group in ASEAN to be one of 30 founding member banks to draft the UNEP-FI’s Principles for Responsible Banking, recently launched at the UN General Assembly on 22 September 2019. Further, to catalyse action on Sustainability through the Business & Finance sector, CIMB Group will be hosting The Cooler Earth Sustainability Summit on 1-2 October in Kuala Lumpur.
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