KUALA LUMPUR: HSBC Amanah Malaysia Bhd has launched the world’s first United Nations (UN) Sustainable Development Goals (SDG) sukuk.
The landmark sukuk by HSBC Amanah will be the first ever benchmark sustainable sukuk issuance by a financial institution that will be used to support eligible businesses within any of HSBC’s selected seven UN SDG.
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 and proceeds will be utilised for working capital in the ordinary course of HSBC Amanah’s Islamic banking business, to finance eligible businesses and projects in accordance with the HSBC SDG Bond Framework.
The offering received strong investor demand, with final orderbooks 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 reflects the bank’s commitment in line with HSBC Group’s responsibility to help finance global sustainable development.
This is the second SDG issuance from HSBC entity globally, following HSBC Group’s US$1 billion SDG Bond in 2017 and is in line with the group’s commitment to provide US$100 billion in sustainable financing and investment by 2025.
It said the goal is one of five new commitments that HSBC has made to tackle climate change and support sustainable growth in the communities where the organisation serves.
HSBC Bank Malaysia Bhd group general manager and chief executive officer (CEO) Stuart Milne said the suskuk is the world’s first ever benchmark sustainable sukuk issuance by a financial institution referencing the UN SDGs as 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 award winning landmark sukuk transactions on behalf of our clients.
“This issuance by HSBC Amanah demonstrates our continued commitment to the government of Malaysia’s efforts to promote Malaysia as an Islamic finance hub and is a strong testament to HSBC’s leadership in sustainable financing,” he said in a statement.