Singapore Telecommunications (Singtel) has priced US$100 million ($136.5 million) worth of five-year digital sustainably-linked bonds (SLBs).
According to the telco, the pricing of the digital bonds were done as part of its commitment to support sustainability and the digitalisation of the financial ecosystem.
The SLB is a partnership between Singtel’s wholly-owned subsidiary Singtel Group Treasury (SGT), UOB and ADDX.
The digital SLB is guaranteed by Singtel and will be drawn down under SGT’s existing $10 billion Euro medium-term note programme.
The USD-denominated SLB, which is Singapore’s largest foreign currency digital bond, will carry a fixed coupon rate of 3.56% per annum and will mature on April 27, 2027.
Post-hedging, the effective S$ interest rate is below 3% per annum.
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The SLB is launched under Singtel’s sustainability financing programme, Olives, and has been issued in accordance with the Singtel Group sustainability-linked bond framework.
The group has committed to reducing its absolute greenhouse gas emissions (Scope 1 and 2 in tCO2e) by 2025, compared to a 2015 baseline. If the stated target is not met by the maturity date of the SLB, the group will make additional investments into defined green efforts of an amount equal to not less than 0.25% of the outstanding aggregate principal amount of the SLB.
UOB is the lead manager for the issuance and the entire SLB will be tokenised on the digital securities exchange ADDX.
Arthur Lang, Singtel’s group CFO, says, “Singtel’s first digital sustainability-linked bond reaffirms our commitment to sustainability and to bring the benefits of digitalisation to everyone. Directly linking our fund-raising efforts to the group’s environmental sustainability targets makes it clear we take our commitment to sustainability seriously. And through technologies such as blockchain, we hope to pave the way to democratise funding, giving a more diverse group of investors the opportunity to participate in Singtel’s growth, and supporting the digitalisation of our financial ecosystem.”
Frederick Chin, head of group wholesale banking and markets at UOB, says, “The market now is trending towards asset tokenisation and there is an increasing interest from our clients to digitalise their assets.”
ADDX CEO Oi-Yee Choo says, “Digital securities now play a vital role in climate action. When applied to sustainability-linked bonds and other forms of green financing, digital securities improve the cost efficiency of issuances and encourage a higher number of sustainable projects. In the case of cutting-edge sustainability technologies, such as electric vehicles or solar power, digital securities can also help expand access to funding, not just via bonds but also via private equity or venture capital sources.”
Shares in Singtel and UOB closed at $2.66 and $31.15 respectively on April 21.
