The Monetary Authority of Singapore (MAS), on Aug 1, announced that it will be issuing Singapore’s inaugural sovereign green bond within the week.
The sovereign green bond is known as the Green Singapore Government Securities (Infrastructure) or Green SGS (Infra).
The green bond will be launched via a book-building process, and will be denominated in Singapore dollars (SGD) with a tenor of either 30 or 50 years, at a minimum issuance size of about $1.5 billion.
The exact tenor and issuance size will be determined based on prevailing market conditions.
Singapore’s first sovereign green bond will form part of the pipeline of up to $35 billion of sovereign and public sector green bonds that the Singapore government and its statutory boards will issue by 2030.
The Green SGS (Infra) will be issued under the Singapore Green Bond Framework. The framework details the proceeds of the government’s green bonds, the governance structure to select eligible projects, the operational approach to manage green bond proceeds, and the commitment to annual allocation and impact reporting.
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According to MAS, proceeds from the inaugural Green SGS (Infra) will be used to finance expenses to support the Singapore Green Plan 2030, which includes the Jurong Region Line and the Cross Island Line.
The planned issuance marks the introduction of syndication as a new method for issuing SGS, complementing the regular schedule of SGS auctions.
The method involves the appointment of a group of banks (or bookrunners) to jointly market and distribute a bond.
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In this case, the banks are: DBS Bank, Deutsche Bank AG Singapore Branch (DB), The Hongkong and Shanghai Banking Corporation Limited Singapore Branch (HSBC), Oversea-Chinese Banking Corporation Limited (OCBC), and Standard Chartered Bank (Singapore) Limited (SCB).
As the issuance parameters such as tenor and size are determined on the date the SGS bond is priced, issuing SGS via syndication enhances the government’s ability to issue across varied market conditions, says MAS in its Aug 1 statement.
Syndications of SGS (Infrastructure) will take place under a newly established Medium Term Note programme.
Institutional investors may apply to purchase the inaugural Green SGS (Infra) via the appointed bookrunners mentioned above.
Meanwhile, individual investors will be able to apply for bonds via application channels provided by DBS (including POSB), OCBC, and United Overseas Bank Limited (UOB), after MAS announces the opening of the public offer.
