CapitaLand Investment (CLI) has raised RMB1 billion ($186 million) from the second tranche of its inaugural sustainability-linked panda bond, says the group in its July 15 announcement.
The second and final tranche of the bond saw an order book that was 2.64 times subscribed, bringing the total amount raised to RMB2 billion.
The panda bond was issued at a fixed coupon rate of 2.8% per annum (p.a.), putting it at a record low upon panda bonds with a three-year tenor issued under a private placement. This will contribute to lowering CLI’s financing costs.
CLI raised RMB1 billion from its first tranche with a fixed coupon rate of 3.5% per annum p.a. and a subscription rate of 1.65 times in March.
According to CLI, the net proceeds from the panda bond will be used to refinance its existing borrowings.
The sustainability-linked panda bond is pegged to CLI’s target to reduce energy consumption intensity by 7.5% at its properties in China by 2025 from the base year of 2019. Including the panda bond, CLI’s total sustainable finance has reached $18 billion since 2018.
See also: CapitaLand Investment raises RMB1 bil from first sustainability-linked panda bond
“Demand for our inaugural panda bond continues to be strong, affirming investors’ confidence in CLI’s long-term competitiveness and strong execution capabilities,” says Puah Tze Shyang, CEO of CLI (China).
“The successful issuance has deepened our access to domestic funding in line with our China for China strategy. It also dovetails CLI’s capital sources with its sustainability goals as we continue to seek responsible growth. Tapping on lower-cost RMB capital will help to mitigate foreign exchange fluctuations and further demonstrates our disciplined capital management,” he adds.
CLI’s panda bond is rated AAA by China Chengxin International Credit Rating Co., Ltd. China International Capital Corporation is the lead underwriter and bookrunner while HSBC Bank (China) is the joint lead underwriter and joint bookrunner for this transaction.
Shares in CLI closed 13 cents higher or 4.85% up at $2.81 on July 12.
