Triple A Sustainable Capital Markets Regional Awards 2020
Kingdom of Thailand
The Kingdom of Thailand (KoT) spearheads the sovereigns’ commitment towards sustainable finance in 2020, raising a total of 50 billion baht (US$1.67 billion) in sustainability bonds – the first of their kind in the Asean region. It initially tapped the market in August for 30 billion baht in two tranches. The first tranche was a 10-billion baht green bond, the proceeds of which were used to finance the Mass Rail Transit (MRT) Orange Line project, while the second tranche was a 20-billion baht social bond, with the proceeds earmarked for projects specifically designed to prevent and/or alleviate unemployment stemming from the Covid-19 pandemic.
KoT then re-opened the deal in November and raised another 20 billion baht to refinance the expenditures on the expansion of the MRT Orange East Line project, which is in line with the UN Social Development Goals (SDGs) and climate change movement through the promotion of low-carbon transportation. This offering received a climate bond standard certification from Climate Bonds Initiative.
Zhenro Properties Group
Chinese property developer Zhenro Properties Group is selected as Corporate Issuer of the Year as it expands its financing objectives to cover future ESG targets. The company accessed the green bond market twice in 2020, pricing its inaugural offering in September with a US$350 million 4.4-year non-call, 2.4-year green senior notes. The deal attracted the participation of ESG investors, which enhanced the quality of the order book. Over 34% of the book was allocated to European investors and skewed towards to ESG-dedicated real money accounts.
The company returned to the market in November with another US$200 million 363-day green senior notes, with the demand peaking at US$2.3 billion. On the back of such a strong demand, Zhenro was able to print the deal with a negative new issue concession of between 5bp and 10bp. The key objective of the company’s green strategy is to finance projects relating to green buildings, renewable energy, energy efficient projects, pollution prevention and sustainable water management.
Following the pricing of its first sustainability bond in October 2018, Kookmin Bank continues to pursue the sustainability theme in its fund raising in 2020. The bank priced five sustainability-related transactions in different currencies during the year, raising over US$2.38 billion equivalent.
It first tapped the market in April with a 400 billion won (US$364 million) Covid-19 response social bond, followed by a Covid-19 response sustainability bond amounting to US$500 million in May. It returned to the domestic bond market also in May with another sustainability bond amounting to 450 billion won.
Then in July, Kookmin priced the first euro-denominated sustainability covered bond issued by a Korean bank amounting to 500 million euros (US$610 million) with the proceeds again utilized for Covid-19 relief efforts. The sustainability format significantly increased the demand from key ESG accounts. In October, the bank printed the first Covid-19 response sustainability subordinated tier 2 bond issued out of Asia amounting to US$500 million, achieving the lowest coupon among all subordinated paper issued by Korean commercial banks.
Bank of China
Bank of China (BOC) is another financial institution that distinguished itself in sustainable finance in 2020. The bank’s Macau branch priced in February a HK$4 billion (US$516 million) and a one billion pataca (US$125 million) SME-themed Covid-19 social bond. This is the first-ever social bond from a Chinese issuer in the international capital markets, with the proceeds used to support micro, small and medium-sized enterprises in Macau, addressing their financing difficulties amid the outbreak of the pandemic. This is also the first social bond denominated in Hong Kong dollar.
In September, the BOC branches in Macau and Paris printed the first blue bond issued by a commercial bank globally amounting to US$500 million and CNH 3 billion (US$461.50 million). This is also the first blue bond out of the Asia-Pacific region and only the fourth in the world. The proceeds are used to support ocean conservation by financing marine and ocean-based projects that have positive environmental, economic and climate benefits.