New World Development (00017-HK)A 10-year US$200 million Sustainability-Linked Bond (SLB) was issued on Thursday.J.P. MorganandUBS GroupIt is the joint global coordinator, joint bookkeeper and joint structuring agent for this transaction. Yang Yongcheng, head of UBS Asia's green/sustainable debt financing department, said that SLB is an innovative product in the Asian market, excluding the non-dollar-denominated SLB issued by Holico in Japan.ShinsekaiThis transaction is the first US dollar SLB on the Asian open market, and the first global real estate company to issue an SLB.
This time, the bond issuance innovation world has recorded a new low interest rate. The final price is T+275 basis points. Yang Yongcheng pointed out that the price was slightly lower than the T+280 basis points of the company's current 10-year bonds in the second-hand market; investors responded enthusiastically, with a peak of 1.2 billion US dollars, which was 6 times oversubscribed; 79% of the subscribers were international ESG investors, including well-known fund managers, asset managers, and insurance companies. By region, Asian investors accounted for 82% and European investors accounted for 12%.
Yang Yongcheng said that SLP is different from green bonds. Proceeds do not need to be earmarked for green construction, but can be used for general corporate purposes; if New World fails to use 100% renewable energy in the 2025/26 fiscal year, it will have to buy a carbon offset equal to the annual interest rate of 25 basis points of the bond as compensation. Since less than 1% of rental properties in the New World Bay Area currently use renewable energy, it can be seen that it is not a promise that can be reached casually. It is quite ambitious, and this concept is approved by investors.
He added that issuing SLB is not an innate condition, but rather whether they are willing to do so. Failure to fulfill promises linked to bonds will create a negative image for the company concerned; although not all companies are willing to spend time and resources to research and issue SLB, due to the flexible use of capital and providing one more option, he believes SLB can still become a trend. New World has already issued 700 million US dollars of perpetual bonds per month. This year's capital requirements are not too large. Therefore, the current SLB scale is only 200 million US dollars. It is estimated that the average SLB issuance scale can reach 300 million to 500 million US dollars or more.
(Credit Network)