CIMB to issue USD500 million RegS/144A SDG Bond, the first in international capital markets by a Malaysian bank issuer
14 January 2022
Kuala Lumpur: CIMB Bank Berhad (”CIMB Bank”) has successfully priced its USD500 million RegS/144A Sustainable Development Goals Bond (“SDG Bond”) on 13 January 2022, marking the first ever RegS/144A SDG Bond to be issued by a Malaysian bank in the international capital markets. This USD SDG bond also marked the first ever 144A bond offering into the US markets by a Malaysian bank. The SDG bond complies with CIMB Group’s updated SDG Bond & Sukuk Framework, which is aligned with the latest market standards including the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines issued by the International Capital Market Association, and was assessed as credible and impactful by second party opinion provider, Sustainalytics.
The RegS/144A SDG 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 SDG 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%, 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, and 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 Chief Executive Officer of CIMB Group said, “We are pleased with the success of our USD SDG Bond transaction, and proud to be the first Malaysian bank to successfully venture into a 144A offering. It helps to further expand our fixed income investor base into the US, and at the same time supports our aim to be a catalyst for real sustainable action in ASEAN. As sustainability is a strategic agenda for CIMB, this SDG Bond also enables CIMB 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 Berhad, JPMorgan and Standard Chartered Bank are the Joint Bookrunners for the SDG Bond, while CIMB Investment Bank Berhad 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 (“UNEP FI”) Principles for Responsible Banking in 2019, and was recently the first ASEAN bank to join the Net-Zero Banking Alliance.
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