CDL Properties Limited (CDLP) on April 6 launched the first green bond issued by a Singaporean company. CDLP is a wholly-owned subsidiary of one of Singapore’s largest commercial landlords, City Developments Limited (CDL).
The two-year senior secured green bond amounted to S$100 million (US$71.43 million) and carried a fixed interest rate of 1.98%. It was mainly sold to financial institutions and fund managers.
Proceeds from issuance will be used to repay a S$100 million loan extended by CDL to CDLP, which owns Republic Plaza, one of Singapore’s tallest skyscrapers. Completed in 1996, the Grade-A office building has continuously been upgraded, including the major retrofitting of chiller plants and the installation of energy efficient lightings with motion sensors to enhance the building’s energy efficiency.
As a result of continuous efforts to improve its energy and water efficiency, Republic Plaza generates more than S$1.2 million in savings from energy and water consumption annually.
The success of CDL’s maiden green bond issuance paves the way for the other Singaporean companies to tap into the fast-growing green bond market to finance green building projects and sustainability initiatives.
CDL deputy CEO Sherman Kwek says green finance offers an alternative funding stream for the company. “There is an increased interest in socially responsible investments and a growing demand for relevant products,” he points out. “CDL’s inaugural green bond links our sustainability initiatives with the capital markets and enables us to tap on investors who are supportive of the commitment that CDL has made over the past two decades towards sustainability best practices.”
Kwek says CDL’s green bond issuance also complements the Singaporean government’s target of greening at least 80% of the country’s building stock by 2030, which could potentially be the lynchpin of Singapore’s climate pledge to reduce its greenhouse gas emissions.
“It is clear that for the next 13 years, real estate companies have a large role to play in mitigating climate change and contributing towards Singapore’s greening and greenhouse gas emissions reduction goals. We would certainly be keen to explore more green bond issuances in the future,” he adds.
The Singapore government is increasingly taking steps to match the demand for sustainable investments. Green bonds are among a wide range of sustainability-oriented benchmarks, funds and products that the Monetary Authority of Singapore is seeking to promote locally.
The green bond was prepared in alignment with the Green Bond Principles, a set of voluntary guidelines encouraging transparency and disclosure of a bond’s use of proceeds, project evaluation and selection criteria, management of proceeds and ongoing impact reporting commitments.
Sustainalytics, a leading global provider of environmental, social and governance (ESG), and corporate governance ratings and research, provided a second party opinion on the robustness of the green bond framework and its environmental credentials. It has also independently rated CDL as an industry leader in ESG performance. KPMG verified the Climate Bonds Certification of the green bond issuance.
The green bonds are issued under CDLP’s S$700 million medium-term note programme. DBS acted as the sole bookrunner for the transaction.