Last Friday (June 10), Hong Kong-listed real estate firm, New World Development, became Asia’s first non-financial corporate to issue a USD-denominated social bond in the public bond markets. The issuance also marked the first time that a Greater China-headquartered company had closed a USD-denominated green perpetual facility in the public arena.
The dual-tranche offering comprised a $200 million dollar social note with a coupon rate of 5.875%, which priced at 290 basis points over US Treasuries; and a $500 million green perpetual note with a coupon of 6.15%.
An announcement by the firm detailed that the bonds were nearly five times oversubscribed at peak, with participation from over 100 investors per tranche, including fund managers, asset managers and private banks.
“The growth of social bonds is reflecting a diversification of sustainability objectives financed by investors,” a spokesperson for New World Development told FinanceAsia.
“Corporations and financial institutions will become more active in the social bond market as the pandemic accelerates private issuers' interest in social considerations.”
The contact confirmed that the proceeds from the notes will be used to develop further a number of social projects that the company has committed to, but declined to elaborate further.
New World Development first tapped the sustainable debt markets in 2018, when it raised $310 million in capital under New World China Land’s medium-term note programme. Since then, the firm has raised another HKD $1.30 billion ($ 166.37 million) through two bonds issued in Spring 2021, to finance the development of a 529,000 sq ft complex in Lai Chi Kok.
“We will continue to provide greener, more sustainably project in the pipeline, not only as a commitment to shareholders, but also to the community and society,” the spokesperson told FA.
Linklaters acted as legal advisor to New World Development on the issuances, while Mizuho Securities, Morgan Stanley, Standard Chartered and UBS participated as joint bookrunners. HSBC and UBS also acted as joint green structuring advisors and Joint social structuring advisors.
