Photo: Sembcorp Industries
Sembcorp Industries has, on June 2, successfully priced its inaugural $400 million green bond offering.
The 10-year bonds, which will carry a 2.45% coupon, has been priced through Sembcorp’s wholly-owned subsidiary, Sembcorp Financial Services.
The Series 001 bonds, which are due 2031, were issued under Sembcorp’s $3 billion multicurrency debt issuance programme established by Sembcorp and Sembcorp Financial Services.
The payment obligations of Sembcorp Financial Services will be guaranteed by Sembcorp.
According to Sembcorp, the offering was “competitively priced” with over 90% of the green bonds placed to institutional investors predominantly in Asia Pacific, with “some participation” from Europe.
Following the completion of the offering, Sembcorp will have successfully issued the first certified green bond under the Climate Bonds Standard by a Singapore-based energy company.
Net proceeds from the issue of the bonds will be used to finance or refinance new or existing projects under the list of Eligible Green Projects in the Sembcorp Green Financing Framework, which was launched in May.
These projects should also meet Climate Bonds Initiative (CBI) sector-specific technical criteria.
The Sembcorp Green Financing Framework is aligned with the CBI’s Climate Bonds Standard v3.0; the latter’s certification provides an assurance to investors that the issuer will use the proceeds to finance or refinance projects needed to deliver a low-carbon economy and are consistent with the Paris Agreement’s long-term temperature goal.
SEE: PhillipCapital downgrades Sembcorp Industries as positives already 'priced in'
The bonds have received pre-issuance certification from the Climate Bonds Standard Board in May. Ernst & Young (EY) has also assured the bonds’ conformance with pre-issuance requirements of the Climate Bonds Standard v3.0.
DBS Bank and United Overseas Bank Limited (UOB Limited) are the joint lead managers for the issuance and offering of the notes. OCBC Bank acted as the green finance advisor in preparation of the framework.
“Sembcorp has articulated our strategic vision to be a leading pan-Asian provider of sustainable solutions, and we are committed to the target of having 10 gigawatts (GW) of gross installed capacity by 2025. The resounding support from investors for our inaugural green bond offering has given us strong confidence to drive firmly ahead with our strategy,” says Wong Kim Yin, group president and CEO of Sembcorp Industries.
“Tapping new sources of capital, including green financing, is a key thrust for Sembcorp as we reposition our portfolio and drive strategic green growth. We are pleased that the launch of our Climate Bonds Standard Certified Green Bonds demonstrates our ability to access green sources of financing at competitive pricing levels and we are committed to using the proceeds to contribute to a low-carbon economy,” says Eugene Cheng, group CFO of Sembcorp Industries.
The bonds are expected to be listed on the SGX-ST.
Shares in Sembcorp Industries closed 2 cents lower or 0.9% at $2.20 on June 2.
