Singtel’s first digital sustainability-linked bond reaffirms the Group’s commitment to sustainability and support the digitalisation of the financial ecosystem
Singtel, as part of its commitment to support sustainability and the digitalisation of the financial ecosystem, today announced the successful pricing of Singapore’s largest foreign currency digital bond.
Singapore telecoms firm Singtel has issued a $100 million US dollar denominated tokenized bond on the ADDX digital securities exchange. UOB, Singapore’s third largest bank, was the lead manager.
The US$100 million, five-year digital Sustainability-Linked Bond (SLB) is a partnership by Singtel’s wholly-owned subsidiary, Singtel Group Treasury (SGT), with UOB – ADDX. The digital SLB will be drawn down under SGT’s existing S$10 billion Euro Medium Term Note Programme, guaranteed by Singtel. The SLB will carry a US$ fixed coupon rate of 3.56% per annum and will mature on 27 April 2027. The net proceeds from this issue will be applied by SGT to fund its ordinary course of business.
The bond will be issued on 27 April 2022. Post hedging, the effective S$ interest rate is below 3% per annum.
The SLB is launched under Olives, Singtel’s sustainability financing programme and has been issued in accordance with the Singtel Group Sustainability-Linked Bond Framework established on 14 October 2021.
The Singtel Group has committed to reducing its absolute greenhouse gas emissions (Scope 1 and 2 in tCO2e) by 2025, compared to a 2015 baseline. If the stated target is not met, the Singtel Group will, by the maturity date of the SLB, make additional investments into defined green efforts of an amount equal to not less than 0.25% of the outstanding aggregate principal amount of the SLB.
Mr Arthur Lang, Singtel Group Chief Financial Officer, said, “Singtel’s first digital sustainability linked bond reaffirms our commitment to sustainability and to bring the benefits of digitalisation to everyone.
Directly linking our fund-raising efforts to the group’s environmental sustainability targets makes it clear we take our commitment to sustainability seriously. And through technologies such as blockchain, we hope to pave the way to democratise funding, giving a more diverse group of investors the opportunity to participate in Singtel’s growth, and supporting the digitalisation of our financial ecosystem.”
Mr Frederick Chin, Head of Group Wholesale Banking and Markets, UOB, said, “The market is now trending towards asset tokenisation and there is an increasing interest from our clients to digitalise their assets.
Singtel’s move to tokenise its entire US$100 million sustainability linked bond issuance shows that like-minded issuers are keen to tap the benefits of blockchain technology for greater security and smart contracts for better efficiency.
This isn’t Singtel’s first tokenization experience. A year ago today, HSBC co-led Singtel’s tokenized S$1 billion perpetual securities issuance on the Marketnode platform, a joint venture between SGX and Temasek, both backers of ADDX. However, that tokenization was a blockchain pilot, with the bond issuance additionally following a traditional process.
Being at the forefront of providing progressive financial solutions, UOB is committed to collaborating with industry partners such as ADDX to support our corporate clients to draw on this space for their funding raising needs and enjoy the benefits of asset tokenisation.”
ADDX CEO Ms Oi-Yee Choo said, “Digital securities now play a vital role in climate action. When applied to sustainability-linked bonds and other forms of green financing, digital securities improve the cost efficiency of issuances and encourage a higher number of sustainable projects.
In the case of cutting-edge sustainability technologies, such as electric vehicles or solar power, digital securities can also help expand access to funding, not just via bonds but also via private equity or venture capital sources. As early adopters of digital bonds, Singtel and UOB have demonstrated leadership and an innovation mindset, and ADDX is privileged to work with them on this transformative transaction.”
UOB is the lead manager for the issuance and the entire SLB will be tokenised on the digital securities exchange ADDX. Digital bonds, or tokenised bonds, are issued using blockchain and smart contract technology in order to eliminate manual processes throughout different stages of the security’s life cycle, including issuance, distribution, custody and post-trade servicing.
Meanwhile, ADDX (formerly iSTOX) had $150 million in transactions on its platform in 2021, targeting bonds, funds and equities. Asian, European and non-US American high net worth individuals made up the majority of investors. Several of its recent transactions have tokenized funds including real estate.