ICBC Singapore Issues Bank’s First Green Bond

1 min readUpdated Apr 25, 2019May 13, 201911:33 PM

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State-owned bank offers green Silk Road bond in three currencies one week after a similar exercise by rival Bank of China. Acting through its Singapore branch, the Industrial and Commercial Bank of China (ICBC), the world’s biggest bank by assets, has issued its first green bond offering in three currencies totalling $2.2 billion equivalent, Reuters reported on Wednesday.

The U.S. dollar-denominated tranche includes $900 million three-year floating rate notes priced at three-month Libor plus 72 basis points and $600 million five-year floating rate notes priced at three-month Libor plus 83 basis points. They received over $2.4 billion and $1.5 billion in orders respectively, with Asia buying 92 percent of the deal and the rest coming from EMEA in both cases, according to Reuters.

The 1 billion yuan ($149 million) three-year tranche was priced at 3.3 percent. The 500 million euro tranche received over 1.8 billion euros in orders.

DBS Bank was the only Singapore bank among the issue’s joint global coordinators, which also include ICBC, Credit Agricole, HSBC and Standard Chartered Bank. DBS was also the joint book runner and joint lead manager of the issue. There were 22 underwriters for the bond issue, which intends to support green projects under China’s Belt and Road Initiative.

According to Clifford Lee, DBS Bank head of fixed income, said that ICBC Singapore’s successful issuance of its first green bond is underpinned by its commitment to financing sustainable development along the Belt and Road, «The Business Times» reported.

A week before, Bank of China raised $3.8 billion equivalent across five currencies and eight tranches from its fifth Silk Road bond offering.

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What this means

ICBC Singapore's successful $2.2 billion green bond issue is a strategic play, not just for capital, but to solidify its position in sustainable finance against major rivals like Bank of China, which recently raised $3.8 billion in a similar offering. The strong Asian demand, capturing 92% of the US dollar tranches, validates the growing regional appetite for green investments. While this bank focuses on debt, its proactive stance mirrors the aggressive retail expansions seen by Panpuri across Asia, indicating a broad push for market dominance. This move pressures other financial institutions to accelerate their green financing initiatives. The primary risk lies in proving the effective allocation of funds to genuinely green projects. The next critical development will be the specific project financing announcements under the Belt and Road Initiative.

Aiko Tanaka · Retail News Asia newsroom

Questions & Answers

What was the total value of ICBC Singapore's first green bond offering?

ICBC Singapore's initial green bond offering across three currencies totalled $2.2 billion equivalent. This includes US dollar, Chinese yuan, and euro tranches, demonstrating a significant market entry for the bank in green finance.

Which regions showed the most interest in the U.S. Dollar tranches of the bond?

Asia demonstrated strong interest in the U.S. Dollar tranches, purchasing 92 percent of the deal. The remaining portion of these tranches was bought by investors located in Europe, the Middle East, and Africa (EMEA).

How does ICBC Singapore's bond offering compare to a rival bank's recent activity?

ICBC Singapore's $2.2 billion equivalent offering followed a similar exercise by the Bank of China. A week prior, Bank of China raised $3.8 billion equivalent through its fifth Silk Road bond offering across five currencies and eight tranches.

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