DBS Group Holdings Limited (DBSH) on July 19 announced the successful pricing of a US$500 million floating rate green bond, representing the first such issuance by a financial institution in Singapore.

The five-year bonds bear a quarterly coupon of 0.62% over three-month US dollar Libor. DBS says the issue was well-received, allowing the final price guidance to be tightened meaningfully and achieving a very compelling pricing level for a five-year benchmark deal.

The net proceeds will be used for the financial and treasury activities of DBSH, including the provision of intercompany loans – or other forms of financing – to DBS Bank and its subsidiaries. The DBS group will allocate the net proceeds towards the financing of green projects or assets as described under the eligibility criteria in the DBS Green Bond Framework, with the first green assets expected to include DBS Group’s financing of Marina Bay Financial Centre Tower 3, which was certified Green Mark Platinum by the Building and Construction Authority.

“The launch of our green bond amplifies our commitment to sustainability and to supporting projects which have a positive impact,” says DBS CFO Chng Sok Hui. “It adds another dimension to efforts to green our operations, and lends support to the transition to a low-carbon economy.”

The bonds are issued under DBSH’s US$30 billion global medium-term note programme. DBS acted as the sole green structuring agent and sole global coordinator for the transaction, as well as a joint bookrunner and lead manager along with Crédit Agricole CIB, HSBC, ING Bank (Singapore), Natixis Securities Americas, Société Générale and Wells Fargo Securities. ABN AMRO Securities (USA) was a joint lead manager for the deal.

Sustainalytics provided the second opinion to the green bond issue.

In April this year, City Developments Limited became the first Singapore company to issue a green bond amounting to S$100 million. The two-year senior secured bond carried a fixed rate of 1.98%.