HSBC AMANAH LAUNCHES ‘GREEN’ SUKUK
Proceeds will be used to finance projects that are in line with United Nations Sustainable Development Goals
HSBC Amanah Malaysia Bhd has launched the world’s first United Nations (UN) Sustainable Development Goals (SDG) sukuk.
The sukuk will be the first-ever benchmark sustainable Islamic debt issuance by a financial institution that will be used to support eligible businesses within HSBC’s selected seven UN SDGs.
On September 20, HSBC Amanah priced an offering of RM500 million for a senior unsecured fixed rate SDG sukuk, due in 2023, from its existing multi-currency sukuk programme of RM3 billion.
It was rated “AAA” by RAM Rating Services Bhd.
The offering received strong investor demand, with final order books in excess of RM1.4 billion and a bid to cover ratio of 2.85 times from 25 accounts across government agencies and pension funds (51 per cent), financial institutions (31 per cent), insurance companies (nine per cent), asset managers (eight per cent) and corporates (one per cent).
Proceeds from the sukuk will be used to support projects contributing towards the UN SDGs, including SDG 3 — Good Health and Well-Being, SDG 4 — Quality Education, SDG 6 — Clean Water and Sanitation, SDG 7 — Affordable and Clean Energy, SDG 9 — Industry, Innovation and Infrastructure, SDG 11 — Sustainable Cities and Communities and SDG 13 — Climate Action.
HSBC Amanah said the issuance of the SDG sukuk reflected its commitment to the HSBC group’s responsibility to help finance global sustainable developments.
This is the second SDG issuance from the HSBC entity globally, following HSBC Group’s US$1 billion (RM4.14 billion) SDG bond issue last year, and is in line with the banking group’s commitment to providing US$100 billion in sustainable financing and investment by 2025.
It said the goal was one of five new commitments that HSBC had made to tackle climate change and support sustainable growth in the communities where it served.
HSBC Bank Malaysia Bhd group general manager and chief executive officer Stuart Milne said the sukuk was the world’s first-ever sustainable Islamic debt issuance by a financial institution that referenced the UN SDGs in use of proceeds.
“As such, it is a landmark in the ringgit and global sukuk market.
“HSBC has always been at the forefront of innovation in Islamic financing, having structured and lead-managed numerous awardwinning sukuk transactions on behalf of our clients.
“This issuance by HSBC Amanah demonstrates our continued commitment to the government’s efforts to promote Malaysia as an Islamic finance hub and is a strong testament to HSBC’s leadership in sustainable financing,” said Milne in a statement.