Singapore Prices S$2.4 billion 50-year Inaugural Sovereign Green Bond

The Monetary Authority of Singapore (MAS) has announced that Singapore’s S$2.4 billion inaugural sovereign green bond was priced at 3.04%.

S$2.35 billion of the 50-year bond (the “Aug-72 bond”) was placed with institutional and accredited investors.  The remaining S$50 million of the bond will be offered to individual investors, who may submit their applications from 9:00am on 5 August to 12:00 noon on 10 August 2022, MAS said in a press release.

Placement of 50-year SGS (Aug-72 bond)

The new Aug-72 bond is the first 50-year bond issued by the Singapore Government, and is also the longest-tenor green bond issued by a sovereign to date. The book-building process saw strong investor demand, reflected in today’s combined placement orderbook of more than S$5.3 billion, or 2.26 times the size of the amount offered under the placement. The yield of 3.04% represented a significant tightening of -11 basis points from the initial price guidance at the start of the book-building, while the placement size of S$2.35 billion was at the top end of the targeted issuance size. The bonds were placed with a diverse mix of high-quality institutions. DBS Bank Ltd. (DBS), Deutsche Bank AG Singapore Branch (DB), The Hongkong and Shanghai Banking Corporation Limited Singapore Branch (HSBC), Oversea-Chinese Banking Corporation Limited (OCBC), and Standard Chartered Bank (Singapore) Limited (SCB) were the bookrunners for the transaction.

Mr Leong Sing Chiong, Deputy Managing Director (Markets and Development), MAS, said, “The successful launch of Singapore’s inaugural sovereign green bond marks an important milestone in our sustainability journey. The strong orderbook affirms investors’ confidence in the Government’s plans to build green infrastructure for a financially and environmentally sustainable future. In addition, the extension of the sovereign yield curve to 50 years will further develop the Singapore Dollar bond market and support longer-tenor corporate issuances. MAS will continue to support the pipeline of green sovereign bonds, as well as the broader development of green finance as an enabler of global efforts to mitigate climate change.”

Public Offer of the Aug-72 bond

The Aug-72 bond will be open for applications from individual investors from 9:00am on 5 August 2022 to 12:00 noon on 10 August 2022. S$50 million of the bond will be offered to the public. The effective yield will be 3.04%, as determined through the institutional book-building process. This entails a coupon rate of 3.00% per annum and a price of S$98.976 per S$100 in principal value.

Individual investors who wish to subscribe to the Aug-72 bond should review the product details carefully, and assess whether the risk/returns and characteristics of long-tenor bonds meet their financial needs. Investments in Singapore Government Securities (SGS), including the Aug-72 bond, bear market risk. If investors sell the bond before its maturity date, they may receive less, or more, than their original investment, as the market price of the bond may rise or fall with changing market conditions. 

All applications for the Public Offer should be made using the Electronic Securities Application (ESA) or Initial Public Offer (IPO) Application, which is available via the application channels [2] of DBS (including POSB), OCBC, and United Overseas Bank Limited (UOB). As the application process differs from that of SGS issued via auctions, investors should familiarise themselves with the application instructions before making their applications.

This includes taking note of the following key features:

Each application unit represents S$100 in principal amount of the bonds and has a settlement price of S$98.976.

Each application must be made in respect of a minimum of 10 application units or in multiples of 10 application units (10 application units representing S$1,000 in principal amount of the bonds and with a settlement price of S$989.76).

Only one application per individual (across all banks) will be accepted. Multiple applications will be rejected.

In the event of over-subscription, MAS will seek to allocate the bonds to as many individuals as possible, taking into account the distribution of applications.

Please refer to the Product Fact Sheet on the application process for the Public Offer of the Aug-72 bond.