New World Development (NWD) has priced a dual-tranche social and green bond offering totalling US$700 million, the first of its kind in the public markets.
The deal makes the Hong Kong-based property developer the first non-financial corporate in Asia to issue a USD-denominated social bond and the first corporate in Greater China to issue a USD-denominated green perpetual in the public bond markets, NWD says.
The five-year US$200 million social bond carries a coupon of 5.875%, representing a spread of 290bp over US treasuries, while the US$500 million green perpetual bond has a coupon of 6.15%.
Both were oversubscribed by nearly 5x at their peak, with strong participation from over 100 investors on each tranche, including renowned fund managers, asset managers and private banks.
The bonds were issued in Hong Kong under the group’s sustainable finance framework, which was recently refreshed to stay up-to-date with evolving international standards and best practice.
The company received a positive second-party opinion of the framework from Sustainalytics.
The banks involved in the transaction were HSBC, Mizuho Securities, Morgan Stanley, Standard Chartered and UBS as joint bookrunners. HSBC and UBS were also joint green structuring advisers and joint social structuring advisers.
“We are delighted to be the first corporate in the world to issue a USD-denominated social and green dual tranche offering in the public bond markets,” says NWD chief financial officer Edward Lau. “The growth of social bonds is reflecting a diversification of sustainability objectives financed by investors. Corporations and financial institutions will become more active in the social bond market as the pandemic accelerates private issuers’ interest in social considerations. And, while the recent surge may have been precipitated by Covid-19, the appeal of social bonds as a sustainable finance instrument may endure long after its effects have subsided.”
Proceeds from the green perpetual bond will be used to pursue the group’s commitment to building sustainable cities and communities. NWD secured Hong Kong’s first green loan in 2018 and has since continued to actively leverage and innovate sustainable financing to generate momentum for sustainable development in the region.
Last year, it became the first real estate developer to price a USD sustainability-linked bond, with a sustainability performance target aligned with the company’s “Renewable Energy Roadmap”, which will support efforts to decarbonize under the Paris climate agreement.
The company also boasts a track record in achieving state-of-the-art certified green and healthy building designs and award-winning sustainable operations in buildings, such as K11 Atelier King’s Road, one of the world’s first to achieve triple platinum green and healthy building certifications in WELL, LEED and BEAM Plus.
Source: theasset.com
