CIMB Bank Bhd plans to channel the proceeds from its Sustainable Development Goal (SDG) Bond to eligible sustainable projects such as SMEs and start-ups, affordable housing, public schools and hospitals, green mass transit, climate resilient buildings and infrastructure, forestry, and wildlife conservation projects, as well as Covid-19 and other global pandemic financing.
The bank has successfully priced its US$500 million RegS/144A SDG Bond on 13 January 2022, marking the first ever RegS/144A SDG Bond to be issued by a Malaysian bank in the international capital markets
The positive reception for the SDG Bond reflects the accelerating global shift towards sustainable investing among a diverse investor base. Banks took up 34% of the bond while 43% was subscribed by fund managers, followed by 22% by securities firms and the remaining 1% subscribed by corporates.
The SDG Bond – a 5.5-year fixed rate note priced at a spread of 70 basis points above the 5-year US treasury, with a yield of 2.189%, will be issued on 20 January 2022 under CIMB Bank’s existing USD5 Billion Global Medium Term Note Programme.
Dato’ Abdul Rahman Ahmad, Group CEO of CIMB Group said, “We are pleased with the success of our USD SDG Bond transaction, and proud to be the first Malaysian bank to successfully venture into a 144A offering. It helps to further expand our fixed income investor base into the US, and at the same time supports our aim to be a catalyst for real sustainable action in Asean.
“As sustainability is a strategic agenda for CIMB, this SDG Bond also enables CIMB to diversify our fundraising strategy and tap into a fast-growing pool of sustainable investment funds in the global markets. This is very much in line with our commitment to mobilise RM30 billion towards sustainable finance by 2024.”
The SDG Bond reflects CIMB Group’s commitment to sustainability, one of the key pillars under its Forward23+ strategic plan. CIMB was one of 30 founding member banks to draft the United Nations Environment Programme Finance Initiative Principles for Responsible Banking in 2019 and was recently the first Asean bank to join the Net-Zero Banking Alliance.