CIMB to issue US$500mil RegS/144A SDG bond


  • Banking
  • Friday, 14 Jan 2022

CIMB Group Holdings Bhd CEO Datuk Abdul Rahman Ahmad

KUALA LUMPUR: CIMB Bank Bhd (CIMB Bank) has successfully priced its US$500 million RegS/144A Sustainable Development Goals Bond (SDG Bond) on Jan 13, 2022 -- the first-ever RegS/144A SDG Bond to be issued by a Malaysian bank in the international capital markets.

CIMB Bank said the USD SDG bond also marked the first-ever 144A bond offering into the United States (US) markets by a Malaysian bank.

"The SDG bond complies with CIMB Group’s updated SDG Bond and 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," said the bank in a statement today.

It said 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 per cent of the bond, while 43 per cent was subscribed by fund managers, followed by 22 per cent by securities firms and the remaining one per cent subscribed by corporates.

"The SDG Bond - a 5.5-year fixed rate note priced at a spread of 70 basis points above the five-year US treasury, with a yield of 2.189 per cent -- will be issued on Jan 20, 2022 under CIMB Bank’s existing US$5 billion Global Medium Term Note Programme," it added.

According to the statement, the 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).

Proceeds from the SDG Bond will be chanelled to various eligible financing assets/projects such

as affordable housing, start-ups and small and medium enterprises, 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.

CIMB group chief executive officer Datuk Abdul Rahman Ahmad said the bank is pleased with the success of its USD SDG Bond transaction, and is 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, in line with our commitment to mobilise RM30 billion towards sustainable finance by 2024," said Abdul Rahman.

BofA Securities, CIMB Investment Bank Bhd, JPMorgan and Standard Chartered Bank are

the joint bookrunners for the SDG Bond, while CIMB Investment Bank Bhd and BofA Securities are the joint arrangers for the US$5 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 Principles for Responsible Banking in 2019, and was recently the first ASEAN bank to join the Net-Zero Banking Alliance. - Bernama

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