SINGAPORE: CapitaLand Investment(CLI) raises RMB1 billion (S$187.1 million) from its first sustainability-linked panda bond, The Edge Singapore reports.
Notably, this marks the first time a Singaporean company has ventured into the sustainability-linked panda bond market. CLI’s panda bond has a three-year tenor and a fixed coupon rate of 3.5% per annum.
It attracts significant attention from institutional investors and boasts a subscription rate of 1.65 times.
By tapping into this new avenue of funding, CLI can access lower-cost RMB capital, thereby expanding its domestic funding channels and investor base, consistent with its China-for-China strategy.
CLI’s sustainability-linked panda bond is also tied to the company’s objective of reducing energy consumption intensity by at least 6% at its properties in China.
This aligns with CLI’s broader sustainability ambitions outlined in its 2030 Sustainability Master Plan, which includes targets such as achieving Net Zero carbon emissions for scope 1 and scope 2 by 2050 and reducing scope 1 and 2 carbon emissions by 46% by 2030.
Puah Tze Shyang, CEO of CLI (China), expressed his satisfaction with the bond’s success, saying:
“The successful debut of our first panda bond demonstrates the confidence that institutional investors have in CLI’s established track record and long-term growth prospects in China.
It enables CLI to diversify our capital sources and increase our financial flexibility. The panda bond also integrates our financing efforts with CLI’s sustainability performance, demonstrating our focus on responsible growth.
This latest initiative to tap the sizeable domestic capital market in China helps mitigate foreign exchange fluctuations and is part of our ongoing prudent capital management.”
The panda bond is part of CLI’s RMB2 billion (S$347.2 million) Debt Issuance Programme; the net proceeds from its issuance will be used to refinance existing borrowings.
Conversion Rate: RMB1 = S$0.187100 /TISG
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