Singapore’s largest China-focused real estate investment trust (Reit) CapitaLand Investment (CLI) has successfully issued its inaugural sustainability-linked panda bond, raising 1 billion yuan (US$138.67 million) from investors, making it the first sustainability-linked panda bond issued by a Singapore company.
The panda bond, with a three-year tenor and a fixed coupon rate of 3.5% per annum, has garnered strong demand from institutional investors with a subscription rate of 1.65 times.
It has enabled the company to access lower-cost yuan capital and further expand its domestic funding channels and investor base, in line with its China-for-China strategy. The bond is being issued as part of the company’s 2-billion-yuan debt issuance programme and net proceeds from the issuance will be used to refinance existing borrowings.
The bond is tied to the company’s target of lowering its energy consumption intensity by at least 6% at its properties in China based on energy consumption intensity in 2024 compared with 2019.
The reduction in energy consumption intensity will contribute to the company’s efforts in meeting the targets set out in its 2030 sustainability master plan, which include achieving net-zero carbon emissions for Scope 1 and 2 by 2050, and reducing Scope 1 and 2 carbon emissions by 46% by 2030 compared with 2019.
CLI’s panda bond is rated AAA by China Chengxin International Credit Rating Company. China International Capital Corporation acted as the lead underwriter and bookrunner while HSBC Bank (China) was the joint lead underwriter and joint bookrunner for this transaction.
“The successful debut of our first panda bond demonstrates the confidence that institutional investors have in our company’s established track record and long-term growth prospects in China,” says Puah Tze Shyang, CEO of CLI (China). “It enables us to diversify our capital sources and increase our financial flexibility. The panda bond also integrates our financing efforts with our sustainability performance, demonstrating our focus on responsible growth.”
